Published on Thursday, January 27, 2011

TUI outlines cost cutting strategy


TUI is to rely more heavily on online and self-booking technology to cut its costs in the continued "challenging background".

In a trading update today, the travel giant said it is looking to make £60 million worth of cost savings and has identified further cost savings in the UK business and "central functions".

Chief executive Peter Long said it plans to expand online bookings to "drive greater control of distribution and reduce costs in our mainstream business".

He said TUI would also invest in "increased levels of automation which will improve customer self-service options and simplify our back office processes".

Long said overall bookings are up between 8%-16% in key markets for summer 2011, driven by strong bookings for differentiated products (products exclusive to TUI) which are up 26% in the UK, 46% in the Nordics and 21% in Germany.

"We are accelerating the roll out of differentiated products across all source markets to drive the shift in mix away from commodity products, which will continue to experience margin pressure," he said.

 * TUI has appointed Tanya Murray as distribution director for its education division, based in Brighton.

She joined the company two and a half years ago, having previously worked for Centrica and Santander.

She starts on February 1, reporting to TUI Education COO Paul Hawkes.

By Bev Fearis


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  • for whom the bells toll

    I suspect what we are witnessing here is an organisation turning in on itself or if you prefer the first death throes of a desperate dinosaur. I can understand if TUI feels the need to eradicate the smaller independent high street travel agents, but find it difficult to understand why TUI feels the need to go head to head with their own retail outlets! Is this the start of a closing down programme? Must be. That will please T. Cook with all their new shops! I think TUI are fooling themselves if their thinking is people will part with their hard earned booking holidays on a machine without their being a warm blooded human connection somewhere along the way. Who do their clients call if something goes wrong? Flights yes, as you know exactly what you are getting, but holidays? Never! As an internet operator myself I am very aware of what it takes to get an accommodation booking online. Our average is 11 emails per client. Interactivity is not possible with a booking engine. Nor does a booking engine have personal knowledge or an area or the ability to pass this knowledge on if it had. Won"t work. So independent travel agents take heart, TUI is about to shoot itself in the foot - again.

    By Paul Davis, Thursday, January 27, 2011

  • Agents pay for audit

    So yet again a mainstream operator says "" stuff the agent" and I suppose this is because of the black hole in the acocunts. Just like the banks.

    By DAVID WOOTTON, Thursday, January 27, 2011

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