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Intosol Holdings PLC: DEEP DIVE

INTOSOL draws in guests as it targets expansion in 2019

The luxury travel specialises in bespoke holidays and holds over 3,500 hotel and agency contracts around the world
Garden Route
OVERVIEW: INTO The Big Picture
INTOSOL manages a number of boutique hotels in the picturesque Garden Route area of South Africa

•    Owns and manages portfolio of luxury hotels
•    Runs bespoke holiday planning business
•    15% increase in guest bookings for first quarter of 2019
•    Higher margins predicted for the year ahead


What INTOSOL does

INTOSOL Holdings PLC (LON:INTO) is an international luxury travel company listed on the main board of the London Stock Exchange.

The firm specialises in bespoke holidays and holds over 3,500 hotel and agency contracts around the world.

The company’s technology, VIRTOSOL, is used by its travel consultants to allow customers to preview their trips through interactive videos.

INTOSOL also manages a portfolio of boutique luxury hotels and villas through its SOUL Private Collection.


What it owns

The firm’s SOUL Private Collection is mostly located in South Africa, where it leases and manages the Penthouse on Beach, SOUL Llandudno, SOUL Rainbow’s End and SOUL on the Heads properties.

Oceans Wilderness, a nine-room, high-end boutique hotel located in the picturesque Garden Route area of South Africa, is the company’s first fully owned property, while it also owns a site to build a safari lodge in the Leadwood Big Game Estate, a 5,500-hectare wildlife reserve in the north-east of the country.


Inflexion points

•    In June the company said it had seen a double-digit increase in bookings to its boutique hotels in the first quarter of 2019 and predicted that its new business model will deliver higher margins for the year ahead

•    INTOSOL’s executive chairman Rainer Spekowius said that the group is looking to add more luxury properties to its portfolio in its current financial year, with a view to expanding beyond the South African market

•    In May, INTOSOL bought the Oceans Wilderness hotel for around €1.97mln as part of its strategy of increasing margins through ownership of targeted properties and expanding its luxury portfolio

•    In March the company signed a five-year management contract for the SOUL on the Heads hotel in Knysna on the Garden Route


Executive chairman interview - Rainer Spekowius


Blue Sky

Commenting on the group’s first quarter, Spekowius said “excellent progress” was made in the SOUL Private Collection portfolio, with a 15% increase in guest bookings compared to the first quarter last year.

More significantly, Spekowius predicted a driver of improved financial performance will be the new business model for the hotels business, where existing rental properties are being replaced by new properties on management contracts that are based on a 35% commission on bookings and a profit share such as the opening of SOUL Rainbow’s End in April, which he said would ensure higher margins and capture additional upside from commission on bookings.

Other revenue streams are also being developed, with discussions being held with US tour operators and with villa and estate owners within and outside South Africa regarding potential management and marketing contracts.

Ahead of the October-January high season, Spekowius has also begun tweaking the Private Travel Design division to drive increased revenues, including expanding the team and the list of travel locations as well as “progressing negotiations with potential international partners to establish global divisions” and “actively reviewing potential acquisition targets”.

“With this in mind, we believe we now have the right model in place to see continual improvements in our financial performance as we move into the high season and look forward to providing updates on progress.”

With the shares trading at around 38p as of 19 June 2019, INTOSOL carries a market cap of £4.66mln.

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Intosol Holdings PLC Timeline

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