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Published on Thursday, May 12, 2016

Germans don't understand 'specialist' holidays, says former TUI MD




TUI has rapidly changed strategy since the very recent departure of former chief executive Peter Long, according to Dermot Blastland, former MD of TUI Travel UK and Ireland.


Blastland, who left the travel giant in 2010, made the comments following news that TUI's Specialist Group has been put up for sale under the new brand Travelopia.


The announcement came just weeks after TUI sold off its bedbank Hotelbeds.


"First Hotelbeds has gone, now SHG," said Blastland.


"For over 15 years Peter has talked of the need for differentiation, he wanted TUI to offer a range of products to suit all markets, for every age group, and it's interesting to see how quickly TUI has changed strategy since he's gone."

Long stepped down as joint chief executive in February, leaving Fritz Joussen in sole charge.

"TUI doesn't understand the specialist brands because they don't have them in Germany," added Blastland.


"Culturally the UK is very different to Germany, but I'm not saying it's a mistake to sell off these brands, they might get a good price for them.

"TUI sold Hotelbeds for more than a billion and SHG could be worth something like that."


TUI is expected to net a sizeable gain from the sale of its Specialist Group, which includes Specialist Holidays Group (SHG) and Specialist Events Student (SES), despite removing Crystal Ski and Thomson Lakes and Mountains from the deal.

The specialist division, which includes more than 50 specialist and adventure tour operators in Europe, North America and Australia, had pre-tax earnings of €56.2 million in the last financial year, based on a turnover of €1.8 billion, much less than Hotelbeds whose earnings were close to €117 million, but SHG's growth was 23% versus Hotelbeds' 15%.

While Crystal and Lakes and Mountains, which are not included in the sale, are two of the largest brands in the division in terms of passenger numbers, these were not dominant in terms of profit, said a source close to the business.

The division also includes well-known brands such as Hayes & Jarvis, Sovereign, Exodus, Jetsave, Sunsail and Austravel as well as the trade-only brand Travelmood launched last October.

"SHG consists of some very good, very well-managed brands that will thrive with a new owner," added the source.


"It's the right thing for TUI to sell because they're strategically not the right fit for the company, which wants to be vertically integrated using the TUI brand, but that's not to say that they're not great businesses, because they are.

"For TUI it's all about scale."



 

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  • I agree

    There needs to be an understanding on different markets, especially access. I have written a book on this subject which is worth a read because the market is big. please view my book on www.wheelchairsscooters and sticks.com

    By Terry Reynolds, Thursday, May 12, 2016


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