The Activity Sector has over 40 activity travel companies that operate in the market segments of Marine, Adventure, Ski, Student and Sport (new for 2008). Its customers enjoy unique travel experiences including hiking Kilimanjaro, polar cruising, chartering yachts in the Caribbean, skiing the Peak 2 Peak at Whistler or touring with national cricket, rugby or football teams. Brands include Quark Expeditions, the world’s largest and most diverse polar travel company, Sunsail and The Moorings, leading yacht chartering and beach club brands and Crystal, Europe’s biggest ski operator.

The Activity Sector delivered a strong performance in 2008, with a 25% increase in underlying operating profits, which were up £9.9m to £49.5m (2007: £39.6m). This was achieved through a combination of strong organic growth and acquisitions, principally in the Student and Sport divisions, with organic growth up £5.0m for the Sector.

The Marine division performed very well in 2008, reporting underlying operating profits of £18.3m (2007: £14.9m). Marine operates a combined fleet of approximately 1,360 yachts, 1,100 cruisers and six beach clubs in the Caribbean and Mediterranean. The integration of the two yacht chartering businesses of Sunsail and The Moorings has been successfully completed, and has delivered operational and back office synergies in line with expectations. During the year the businesses also focused on improving asset utilisation and increased yacht occupancy by 2% to 22.1 weeks of charter per yacht (2007: 21.7 weeks). Sunsail Clubs also achieved an increase in beach club occupancy levels of six percentage points to 85% (2007: 79%). The flagship yacht base in Tortola, in the British Virgin Islands, is being significantly upgraded to create the world’s leading yacht charter facility using environmentally friendly technologies and will be completed in 2009.

The Adventure businesses delivered an increase of 13% in underlying operating profits to £14.2m in 2008 (2007: £12.6m). The polar cruising business significantly contributed to this growth as a result of the successful integration of Quark Expeditions (acquired in April 2007) with the existing polar cruising business. Polar cruising also experienced strong customer demand with overall occupancy rates increasing to 91% (2007: 89%). During the year we also built up a market-leading position in Australian overland tours based out of Western Australia, through the acquisition of Active Safari (Planet Perth) and Australian Pinnacle Tours in December 2007 and the integration of these businesses with our existing operator Western Exposure.

The Ski, Student and Sport divisions increased underlying operating profits to £17.0m in 2008 (2007: £12.1m), despite a £2.0m reduction in profitability in the Ski division. The businesses acquired during the year contributed significantly to this growth. Within Student, we acquired CHS, Real Travel and World Challenge Expeditions. The Group first entered the sport travel market in 2007 and, through the 2008 acquisitions of Sportsworld, Gullivers Sport, Events International, Your Sporting Challenge and Fanatics, the Sport division has created a unique portfolio of sports specialist tour operators in the UK and Australia. The Ski division remains the largest outbound ski and lakes tour operator in Europe with approximately 40% market share.