TUI Travel, the international group that owns UK holiday brands including First Choice and Thomson, says online is now its single biggest sales channel in the UK. The news came as the company today announced record results for this market.
Overall, TUI Travel's revenues rose by 9% to £14.7bn in the year to September 30, compared to the same time last year, while pre-tax profits grew by 25% to £360m. In the UK and Ireland, revenue rose 6% to £3.59bn, while customer numbers were up by 1% at 5,440,000 from 5,399,000 last time. UK operating profits rose by 17% to £149m.
Some 39% of bookings from the UK market were made online in 2011, TUI said. That made ecommerce the company’s biggest distribution channel in this country. It compares with 61% of bookings that were made online in its Nordic region, where the company did not issue traditional brochures this year, since customers use the website instead. By contrast, 19% of bookings in its German market were made online and in the Netherlands the figure was 33%.
Work carried out during the year on TUI’s UK Thomson and First Choice websites included improvements to navigation, customer experience and ‘look to book’ ratios.
The company said that in the UK higher margin holidays, particularly child-free holidays aimed at couples, had helped raise revenues. Sales of such holidays were up by 14% while lower margin holidays had, conversely, fallen by 5%. And 19% of customers were attracted by exclusive deals that could only be booked through Thomson and First Choice.
Chief executive Peter Long said that record results had also been seen in the Nordic region, Belgium the Netherlands, Canada and Austria. “These achievement reflect the strength of our strategy to increase differentiated and exclusive product sales, increase controlled distribution with a focus on online to enhance our customer access and reduce distribution costs, and our delivery of the turnaround and cost-efficiency programmes,” said Long. He added: “Even the current challenging market conditions we continue to operate from a position of strength.”
TUI's results contrast with those of UK travel agents Thomas Cook, which last month saw its share price fall sharply as it renegotiated its borrowings. TUI is seen as having moved more successfully into internet sales and into exclusive and differentiated holidays.