Tui cuts winter losses and improves UK market share

Tui cuts winter losses and improves UK market share

Thomson and First Choice parent Tui Travel this morning reported an improved winter performance with losses cut by £43 million to £274 million for the six months to March.

Revenue in the UK and Nordic regions was up by 5% and 10% respectively with the Uk operating loss reduced by £22 million to £103 million.

Tui’s ‘unique’ holiday sales in the UK increased by 15% in the six months while direct distribution rose by 1% to 91%. Online sales accounted for 42% of the total in the UK against 41% a year earlier.

Total transaction value for the online accommodation division was up by 14% for summer 2013.

Summer sales from the UK were up by 13% with the programme 58% sold with improved margins and average selling prices.

Tui reported “significant growth in profitable market share” in the UK.

Chief executive Peter Long said: “Our strategy of focusing on unique holidays and putting our customers at the heart of our business continues to deliver strong growth.

“With our market leading brands and scale we have the ability to give our customers great holiday experiences, at terrific value, in a segment of the market that is increasing in popularity.

“Our drive to ‘modern mainstream’ is contributing significantly to our outperformance in a number of markets where we are achieving strong booking volumes and improved margins.

“Given current trading and the visibility we have within our businesses we anticipate full year underlying operating profit growth of at least 10% on a constant currency basis.”

Summer bookings from the UK are up by 7%, ahead of a 3% increase in capacity.

Trading in the UK continues to outperform the market according to GFK Ascent.

Average selling prices are up by 5%, partly reflecting cost base inflation of approximately 2% and the continued increase in unique holidays.

Sales of unique holidays are up by 15% compared to the same period last year, accounting for 83% of holidays sold to date, up by three percentage points.

Customer demand for the unique Sensatori, Couples and Holiday Village brands remains strong with bookings outperforming the prior year.

Online sales account for 42% of summer holidays booked, up one percentage point on the prior year. To date, 62% of the programme has been sold.

Looking at summer bookings, Tui said: “We remain particularly pleased with strong trading in the UK and Nordic markets, which continue to show double-digit revenue growth.

“Average selling prices and margins across our key source markets are up on the prior year.”

Looking forward, the group said: “Our acceleration to modern mainstream is based on the pillars of unique holidays, direct distribution and operational efficiencies which are key components of the overall group strategy.

“We are confident that this strategy is driving performance and based on current trading we expect to report underlying profit growth of at least 10% on a constant currency basis for the 2013 financial year.”


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