17 September 2008

TUI claims package market is understated

TUI is claiming over 24 million people took a package holiday in the 12 months to June and the collapse of xl.com, which left many people stranded, will boost this number further.

TUIÃ¢â¬â¢s figure for package holiday travellers is far bigger than the estimate of 19 million by the government, which the operator feels is seriously underestimating the market.

New research from Mintel, commissioned by TUI, revealed that 53% of people questioned had travelled abroad on a package in the year. The total number of people taking overseas holidays is 46 million.

Of the 53%, 11% had been on both a package and independent holidays, while 42% had taken only packages.

The government figures are based on the International Passenger Survey, (IPS), which only classifies packages as those holidays Ã¢â¬Åâœmarketed at an inclusive priceÃ¢â¬~. TUI claims travellers who bought several parts of their holiday from the same operator, effectively a package, would be added to the governmentÃ¢â¬â¢s tally of independent travellers.

Ã¢â¬ÅâœFirst Choice and Thomson look after 7.5 million holidaymakers every year. IÃ¢â¬â¢m frustrated when I hear talk of the death of the package holiday,Ã¢â¬~ said TUI UK and Ireland managing director Dermot Blastland.

Ã¢â¬ÅâœOur market is actually stable rather than declining. WeÃ¢â¬â¢re firmly of the opinion that more people are travelling on packages than current statistics indicate and Mintel also predicts this figure will continue to grow [over the next five years].Ã¢â¬~

TUI believes the recent publicity surrounding the collapse of xl.com will lead to more people wanting the security of a package holiday.

Ã¢â¬ÅâœWe hope that will happen and we firmly believe it will,Ã¢â¬~ said customer director Tim Williamson.

Earlier research by TUI found that 90% of holidaymakers felt financial protection was important but 50% wrongly believed they would be covered in the event of a scheduled airline failure.

TUI has repatriated around 5,000 clients of xl.com; some booked a package and were covered while others booked direct and had no protection.

Those who were not covered have been charged a cost price for their accommodation and flown home free of charge by TUI. However, they will face a bill for the flight from the Civil Aviation Authority.

Ã¢â¬ÅâœWe have looked after people and weÃ¢â¬â¢ve also bussed people from the hotel to the airport because we feel that you canÃ¢â¬â¢t leave people stranded, even if they are not your clients,Ã¢â¬~ said Williamson.

Ã¢â¬ÅâœBut it has highlighted the inconsistencies in cover. We feel people will want security in the future and we also feel the government should address the inconsistency in cover for scheduled airlines.Ã¢â¬~

by Jeremy Skidmore (www.jeremyskidmore.com)