TUI cuts UK losses
TUI Travel saw its underlying operating loss in the UK fall by £48m during the first half of its financial year after increasing sales of differentiated and exclusive product.
The operator said there was continued strong demand this summer for differentiated product, sales of which now account for 64% of its total bookings in the UK, up seven percentage points year on year.
On announcing its first half results, the operator also revealed that for summer 2012, 90% of its sales are coming via its own distribution sources, a six percentage point increase year on year. Online sales continue to account for half of TUI’s controlled distribution, it said.
For winter 2011/12, 47% of TUI holidays were booked online.
Chief executive Peter Long said the company was continuing to outperform the market. "We are pleased with our overall performance for the first half," he said. "The UK delivered a strong winter performance which attests to our focus on differentiated and exclusive product and being online driven – key elements of our modern mainstream strategy. Our outperformance in this market is continuing into the summer season and we will ensure that we continue to optimise our position.
"In our online accommodation only businesses we continue to deliver healthy growth driven by new markets as well as increasing market share in more recently established markets.
"Given the challenging economic environment, we remain cautious, however, overall trading performance continues to be in line with the Board’s expectations."
The operator has seen improved trading in all its mainstream markets, except France, it said.
Overall, TUI’s first half loss increased 3% to £317m for the six months to the end of March. Revenue was up 5% to £5,447m. The net debt position at March 31 was £1,184m, up £2m year on year. The Board is proposing an interim dividend of 3.4p per share, an increase of 3%.
By Linsey McNeill
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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