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Published on Wednesday, September 26, 2007

Acquisitions remain 'key priority' for TUI Travel - UPDATED

Giving a trading update on the merged First Choice-TUI businesses, chief executive Peter Long said acquisitions remain a "key priority".

The group spent £81.7 million in the summer purchasing nine businesses within niche specialist areas including deals in Asia and North America. An online car broker and an online independent package holiday review site were among the other buys.

A total of 16 acqusitions have been made worth £227.5 million in the 11 months ending September 30.

The company said summer 2007 demand picked up after a slow start across all source markets and the group has continued to trade in line with expectations.

Thomson's capacity was tightened while First Choice's UK mainstream business saw sales up by 6% on flat capacity, mainly driven by strong long haul sales and a recover in medium-haul over 2006.

Thomson sales were down 4% on lower capacity but margins were good.

Despite this, overall margins continue to be adversely affected by higher Air Passenger Duty and increased fuel costs, the group said.

First Choice specialist sales were up 16%, activity 3% and online destination services 40% with a margin improvement across all sectors.

For summer 2008, the UK and Ireland mainstream business is the only programme to have gone on sale for any "reasonable time" and "we are seeing the benefit of having the two strongest tour operating businesses," the trading statement said.

First Choice sales for next summer are 26% ahead on bookings up by 24%. The programme is three percentage points further sold than at the same point last year with long haul again selling well.

Thomson sales for 2008 are two per cetn ahead on capacity that has been cut by eight per cent.

Overall margins for next summer are "slightly ahead".

Long said: "I am pleased with the way the peak summer trading season has progressed across our businesses and the signs for the future seasons' trading are very encouraging particularly in the UK where we are benefiting from two strong franchises.

"Our acquisition pipeline remains strong and I am delighted with the acquisitions we have completed. Acquisitions remain a key priority for TUI Travel."

by Phil Davies

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  • Review sites

    Expedia has done a reasonably good job of keeping TripAdvisor independent. http://travolution.co.uk/Articles/2007/09/25/1089/TUI
    +Travel+snaps+up+Holidays+Uncovered.html TUI is expected to use Holidays Uncovered in the same way, including allowing other travel companies to continue to advertise on it.

    By Travolution Blogger, Wednesday, September 26, 2007

  • "independent" is the wrong question

    Tripadvisor is not independent, but is still very popular. Why? Because it is useful, rather than independent. If TUI censor feedback on holidaysuncovered it will cease to be useful, and people will migrate elsewhere. If TUI are smart, they will incorporate it into their internal quality control processes, and work on improving customer satisfaction. Review sites mean that customers actively search out properties that keep their clients happy, even at a price premium. So it will be interesting to see what happens, though large corporations tend not to be sensitive to the dynamics of Web 2.0

    By Jon Cockerill, Wednesday, September 26, 2007

  • TUI Aquisitions

    TUI aquired an online independent travel review site. How 'independent' can it be in future.? Alan Thornton Highway Travel.

    By Alan Thornton, Wednesday, September 26, 2007

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