Controlled distribution helps TUI outperform the UK market
Controlled distribution and online sales are helping TUI to "significantly" outperform the UK market, according to its chief executive Peter Long.
Unveiling its third quarter results today, the travel giant said it was pleased with its performance, driven by its differentiated and exclusive product with a focus on online distribution.
For summer 2012, TUI said volumes are trending above the capacity reduction of 6% so it has 12% less left to sell versus last year.
To date it has sold 88% of the programme.
"We continue to be pleased with our price performance, especially during the lates period, with average selling prices up by 9% and improved load factors," said the trading statement.
"In the UK, our strategy of focusing on differentiated and exclusive product distributed increasingly online is delivering superior performance. Differentiated products now account for 63% of holidays sold to date, up seven percentage points on the prior year.
"All inclusive products make up 52% of all holidays sold so far for summer, an increase of six percentage points on the prior year.
"Online sales continue to grow, accounting for 45% of Summer 2012 holidays booked, up by five percentage points on the prior year. As a result, 90% of holidays booked so far this summer have been through controlled channels, up six percentage points on prior year."
For winter 2012/13, TUI said UK bookings are flat in line with capacity.
"So far we have sold 22% of our winter programme in the UK. Average selling price is up 3% and sales of differentiated product are up 9% compared with this time last year."
For the third quarter, TUI blamed the timing of Easter for a 16% drop in operating profit to £74 million and a 2% fall in revenues.
Long added: "We are confident of exceeding our full year expectations based on like for like exchange rates, however, the impact of retranslation of fourth quarter Eurozone profits at current exchange rates leaves us to believe we will perform in line with our expectations for the full-year."
by Bev Fearis
Bev
Editor in chief Bev Fearis has been a travel journalist for 25 years. She started her career at Travel Weekly, where she became deputy news editor, before joining Business Traveller as deputy editor and launching the magazine’s website. She has also written travel features, news and expert comment for the Guardian, Observer, Times, Telegraph, Boundless and other consumer titles and was named one of the top 50 UK travel journalists by the Press Gazette.
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