Tui UK and Ireland’s managing director will address Abta’s Travel Convention in Greece next month following his promotion in June. He spoke to Ian Taylor
Nick Longman expresses himself “absolutely delighted”with his new role asTui UK and Ireland managing director, not least because “it’s a fabulous business”.
Of course, Longman knows Tui UK well, having been distribution director for more than three years before taking charge of Tui’s mainstream tour operations in 2011. He was also UK and Ireland integration director following the merger of Tui and First Choice in 2007 and, prior to that, worked for First Choice for almost a decade.
“The business has gone from strength to strength,” he said, then added: “There are certainly challenges.” Some, such as the massacre of tourists on a beach in Sousse in June when 33 Tui customers died and many more were injured, take some getting over. “I was only three weeks into the job,” said Longman.
He prefers to talk about a challenge he can address: “How do we take a business that has been successful and drive growth?”
Group chief executive Peter Long hailed “a strong UK performance” when reporting “robust” third quarter results last month, highlighting the key issue for Longman: “We’ve done well, [but] it’s important we drive growth. It’s not just about consolidation.”
He explained: “Our cornerstone strategy has been differentiation and exclusivity, and it has served us very well. That will continue. But we want to introduce more flexibility and more choice. It’s also about setting ourselves up so we don’t act like a big company and are slow to market.”
One way of adding flexibility and increasing choice has been to add scheduled flying on short-haul routes this summer.
“Historically, we’ve flown 100% of our own passengers,”said Longman. “Adding scheduled flying was new. It gives us more departure days and destinations. It has been very successful. We’re pretty happy with how it has gone.”
Scheduled flying with easyJet and Monarch made up 1% to 2% of Tui UK’s programme this summer. But Longman’s focus was elsewhere this month as he departed with a group of fellow Tui managing directors on a week-long trip to the Caribbean “to look at new long-haul destinations”.
He said: “We’re visiting Mexico, the Dominican Republic, Jamaica and one or two other destinations.” Any new destinations will be served by the group’s own fleet of Boeing 787s. But in future there could be some scheduled long‑haul flying too: “For example, if people want multi-centre trips.”
Delegates to next month’s Travel Convention will hear Longman explain how he plans to take the UK business forward.
Key to the long-haul expansion, he said, “will be working with other markets”. He explained: “We’ll be much more co-ordinated [as a group] in how we work with hoteliers. For example, a 500-room hotel in Jamaica would be too big for us in the UK – 250 rooms would be enough, and 200 for Germany, 50 for the Netherlands.
“We’re an international group and we’re working collectively. Previously, we didn’t work like that. Of course, we’re still in the UK and still doing our own thing. But in product and purchasing a lot more is done collectively.”
Another key change will be in marketing, with the Thomson brand due to be replaced by the Tui name, probably in 2017.
Longman said: “We’ve done quite a bit of research and it tells us the Tui brand can have a broader appeal than Thomson. Tui is possibly seen as a more modern brand than Thomson and there is a view we can use the brand to access consumers who may not consider Thomson.”
The rebranding is due to begin this autumn in the Netherlands, with France and Belgium to follow next year. Longman said: “We’ve not finalised when we’ll switch to Tui in the UK. It’s not a decision we’re taking lightly and we want to learn from the rollout in other businesses.” But he suggested it would be “within 18-24 months”.
The First Choice brand will be retained. “We’ll continue to work with First Choice,” said Longman. “Having another core brand that resonates with customers is important. It has a specific but sizeable all-inclusive proposition and we’ll continue to invest in it.”
Other changes won’t immediately be obvious to those outside the business. Longman said: “A lot of my focus up to now has been on how we work internally. We want to ensure it doesn’t take five years to bring an idea to fruition. The bottleneck has been technology. We’re in the final stages of changing our reservations system. Then the key will be incorporating scheduled flying and bed banks.We need to broaden our business.”
Longman is starting from a strong base, of course. Tui reported 5% growth in UK bookings year on year this summer and a 4% increase in early bookings for summer 2016.
He said: “[Capacity] this summer has been tight, and a late summer that is tight always prompts people to book early [for next year]. We’re seeing strong demand for next summer.”
Tui reported 91% of its UK summer 2015 programme sold in its update for the nine months to June, with 93% of bookings direct and 53% online.
Longman said: “Online continues to grow and may be higher by the time we finish the season.” But he said: “Our shop portfolio isn’t changing. We’re happy with the number of shops we have. There is no closure programme. We look at a shop’s profitability when a lease comes up and go through a process, but we’re in a pretty stable position.”
He added: “We want to work with the trade. We have a high online share and product of our own, but we have a pretty solid, stable relationship with the trade.
“We’re well supported by some [agents]. Some things we’re looking at lend themselves to retail and to our trade partners. For example, if we expand long-haul and do more multi-centre holidays, we expect more of that to require face-to-face contact.”
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