Geldof's online business merger

Geldof is expanding his business portfolio

Bob Geldof's online travel business Deckchair.com is to merge with a Cardiff-based rival in a deal worth £10m.

World Travel Holdings announced the merger on Monday.

The former Boomtown Rats frontman set up his internet business in April 1999 to offer an easier system for booking travel online to the business and consumer markets.

Deckchair.com has since proved successful in attracting customers who have been signed up with a minimum of advertising.

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The company now boasts a client base of more than 250,000.

World Travel Holdings - which was floated on the Alternative Investment Market in May last year - has established an impressive technology base and caters for corporate and travel agent customers, as well as the retail customer.

But Deckchair's own consumer business is substantially bigger.

'Lean and nimble'

The deal will see the Deckchair brand remain while using World Travel Holdings' technology base and infrastructure, thereby combining the respective strengths of the two companies.

"This deal could never have happened in a bull market. But in a collapsing market, whole new opportunities present themselves for small, lean and nimble operators like us," said Mr Geldof.

Despite the recent downturn in the dotcom sector, the European online travel market is expected to grow by nearly 300% in two years - from £2bn in 2000 to £7.7bn in 2002.

Increased internet usage - with 82 million users in western Europe along - better security and new improved online travel services have contributed to this growth.

Over the next four years, the UK online travel market alone is expected to grow from £592m in 2000 to more than £3.7bn in 2005 and the number of users to jump from 1.6m to 5.7m.