TUI Travel’s digital transformation met with growing online sales

Tui Travel chief executive Peter Long today said the fact more of its holidaymakers were booking online was evidence of the success of its ongoing digital transformation plan.

“Demand continues to grow for our unique holidays and we have seen strong growth in online bookings, a key element of our digital transformation,” said Long, as the travel company reported first-half results.

Tui Travel , which trades in the UK through First Choice and Thomson shops and websites, said that 38% of sales were made online in the first half of the year, up from 34% at the same time last year.

Tui Travel‘s digital aspirations include linking the online and physical worlds throughout its business.

To that end, it has rolled out a digital assistant app in five markets, starting in the UK, that it plans to develop from being an assistant to taking a concierge type role over the next 18 months. So far the apps have been downloaded more than 490,000 times. Then, a Holiday Open Day immersive tool helps customers in the UK and Germany visualize and find their perfect holiday, creating a video that can be shared via social media.

Tui’s UK resort teams are also using tablets “to connect more effectively our physical presence with the digital world”. In the UK, Tui has launched three next-generation stores for its Thomson brand which combine the digital experience with personal service and advice. The company said today that it plans to open three more by the end of this year.

The company is moving to one core online platform across its mainstream holiday offering, which has already been rolled out in the UK and Nordics and will be further expanded this year. “We continue to see significant benefits in conversion rates as a result of the implementation of the new platform,” said the Tui half-year statement. “The optimisation of websites in our core source markets for mobile and tablet us is also driving improved conversion – in the UK, smartphone and tablet bookings improved by 81% in the first half of the year.”

The update on digital strategy came as Tui reported falling sales and losses in the first half of its financial year. Sales fell to £5.2bn in the six months to March 31, 4% down on last year’s £5.4bn, while pre-tax losses improved to £386m from £410m last time. Looking ahead, the company said mainstream summer bookings were slightly down on last year, with 60% of holidays currently sold but average selling prices up by 2%. Online mainstream bookings are up by 6%. In the full year, the company said it was “confident” that full-year operating profits would grow by between 7% and 10%.

Peter Long said: “We have delivered a strong performance in the first half, driven by our flexible and resilient business model.”

He added: “The UK is delivering excellent performance due to market leadership and uniqueness of offering.”