TUI Travel today said it was selling more holidays online as it used digital to develop closer relationships with its customers. This is part of a digital transformation strategy whose benefits, says TUI Travel , its customers are continuing to feel.
The travel company, which trades in the UK through First Choice and Thomson websites and stores, said 38% of its mainstream holidays were now sold online, three percentage points more than at the same time last year. It said £4.1bn of its mainstream business revenue came from online sales, and reflected 6% growth in online package bookings.
The update came as TUI Travel unveiled turnover of £14.6bn in the year to September 30 2014, 3% down on the same time last year. Pre-tax profits grew by 3% to £362m from £169m last time, while underlying operating profits were up by 11% when the effect of currency conversion was removed.
Chief executive Peter Long said the company had outperformed against its roadmap for growth. “The combination of our market leadership position, scale, focus on unique holidays distributed increasingly online and our relationship with the customer throughout their whole holiday experience continues to provide a strong basis for sustainable, profitable growth,” he said.
In today’s results the company outlined its digital strategy “to enhance and deepen the relationship with our customers.” It said its TUI Digital Assistant app, which drives customer engagement across the customer journey, had had 1m downloads. New functionality for the digital assistant includes ‘search and book’ functionality on Thomson and First Choice iPad apps, reflecting the continuing growth in traffic from mobile devices, including tablets. Some 36% of all web visits came from a mobile device in the full year, up from 25% the previous year. TUI said the smartphone conversion rate had grown by just under 50%. Planned future improvements to the app include online check-in via the app, expected by 2015, flight extras, travel documents and hotel check-in.
In the UK, the company said winter bookings were now up by 4%, compared to the same point last year, with 53% of holidays sold, and summer 2015 bookings up by 9%, with 22% already sold.
The company says its ongoing merger with TUI AG, expected to complete on December 11, will create the world’s leading integrated leisure tourism business and provide a foundation for future growth.
TUI Travel’s strategy also includes selling more mainstream holidays (+13%), and increasing its unique holidays, which now account for 71% of its mainstream holidays.
