TUI: a digital and platform organisation.

By | Category: Travel news

It may be smiling but the UK side of the business may not be.

You might have that TUI was a tour operator. With brands like First Choice, Crystal Ski, Marella Cruises and TUI itself you could be forgiven for thinking that.

According to the company’s 272 page annual report, it is a “a developer, investor and operator of hotels and cruise ships.” It was a tour operator but it has transformed itself into something else. It is now “an integrated provider of Holiday Experiences.” More and more it is steering customer onto its own airlines, its own cruises ships,(16) its own hotels (380) and its owned excursions and attractions. (150,000.)

However you want to describe the company and whatever its customers think it is appears to be paying off because, unlike the results from Thomas Cook that we highlighted a little while ago, TUI Group is making profits. But that is masked by good business in some areas and weak business in  oters such as the business area that includes the Uk and Ireland.

Turnover was up 6.3% and European customer numbers were up 4.7% to 21.1 million. But the Northern Region which includes the UK, Ireland and Scandinavia fared badly with reported earnings dropping over 28% compared to 2017. Is the performance in one of its key markets as difficult as that seen by Thomas Cook?

But what does the future hold? For this coming winter, bookings are 1% lower and the average selling price is 2% lower. Yet that selling price is clouded by the fact there was a rise in holiday prices but when converted from sterling to euros a reduction in the selling price was seen. Whilst the company might not like those figures – it doesn’t make much comment on them – us holidaymakers will be paying more for holidays with the company.

It also says that it is a “challenging environment in the traditional tour operator business” meaning that business is tough. Again that’s good for the consumer because it means that competition is keeping prices at a similar level. It suggests that next summer sales won’t be pricey as some had feared due to Brexit. The annual report says that the UK is already more than 20% booked for summer 2019 and that this is an increase of 5% over 2018. More than that it gives no clues to us holidaymakers about where the busy spots ( and hence the higher priced holidays) might be next summer.

The report says that “Going forward, the UK is well positioned as a clear market leader for package holidays, with a high net promoter score for its unique holidays” which doesn’t tell us anything about where it thinks we will book in 2019. It also uses a flawed system to measure customer satisfaction so it cannot be said that customers are telling it what it is satisfied with and what it isn’t. In fact whilst pages are given over to worthy subjects like employees, emissions and sustainability there is little mention of or understanding of customer attitudes.

 

 

 

 

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