TRAVEL WEEKLY BUSINESS
TUI UPDATE: UK chief Dave Burling assesses Tui’s strong Q3 results. IAN TAYLOR reports
THIRD-QUARTER RESULTS: TUI CREDITS ‘UNIQUE PRODUCTS’ FOR 21% PROFIT RISE
Tui Travel’s focus on unique products is driving its strong results and is “almost impossible to copy”, according to UK managing director Dave Burling. The Tui group announced strong
third-quarter results last week, with average selling prices for the summer up 2% on a year ago and a 21% increase in underlying operating profit. Chief executive Peter Long said the
performance was driven by “demand for our unique holidays”. Burling told Travel Weekly: “We believe
we have a much stronger product offering than our competitors and the strategy is almost impossible to copy.” He said: “To do differentiated products
properly you have to create real product concepts. It’s not just a case of attaching a name to a hotel and making a few changes. “It requires expertise, really strong hotel partners and scale. Those things are built up over years and are really hard to copy.” Tui has developed a series of unique
property types – First Choice’s Holiday Villages and SplashWorld and Thomson’s Sensatori – since the first Holiday Village opened 10 years ago. Burling said: “Tui UK is a long-term
investor in these unique concepts, which are driving sustainable growth and [are the reason] we are outperforming the UK market.”
He added: “I liken it to an imitation watch. You might have a watch that looks like
STRATEGY: TUI’S SCALE ‘IMPOSSIBLE TO REPLICATE’
The unique product strategy at Tui Travel has taken years to develop, says Dave Burling. The Tui UK managing director said: “Our
strategy is operating at a higher level. “We have customers who are higher value, who seek out these unique products and book earlier.” But he insisted: “This is not a journey we
started this year.” Burling identified three “ingredients”:
“It requires expertise, strong hotel partners and scale”
the real thing, but it’s not the same.” Burling highlighted a 2% increase in mainstream average selling prices (ASP) year on year in the UK this summer, saying: “The ASPs are really positive.”
But added: “Some of our competitors are
facing real pressure.” Rival Thomas Cook reported a 4% decline
in UK average sales prices in its third-quarter results last week. Burling said: “We are looking at increased customer satisfaction, which results in increased customer recommendations and increased repeat bookings and, ultimately, that means increased average selling prices. “It means people are prepared to pay for
the product.”
expertise, long-standing hotel partners and scale. “We have a strong team working in
product design and development,” he said. “The team from Thomson combined with
First Choice, whose Holiday Village concept is 10 years old – and in my view Holiday Village is still the best high-volume family product in the market. “Our hotel partners are a big part of the formula. Some go back 20 years.” He added: “They trust
us. Take Atlantica Hotels & Resorts, which operates properties in Greece and Cyprus.
It opens new-builds like Sensatori Crete but will also work with us on a major renovation of Aphrodite Hills this winter.” Burling added: “Our scale is impossible to
replicate. We are market leader not just in the UK but across Europe. “It gives us buying power. It allows us to drive down prices for our customers and gives us the distribution to sell products in high volume. Only Tui can do that.
“The combination of expertise, hotel partners and
scale is the way we deliver. I’m talking about the UK, but this is happening across Europe.”
14 August 2014 —
travelweekly.co.uk • 55
DREAMLINER: BURLING TRUMPETS OPERATOR’S INVESTMENT IN B787
Tui UK managing director Dave Burling believes investing in the Boeing 787 secured the final piece in the group’s “unique” jigsaw. Burling said: “Our investment is not only
restricted to hotels – we also invested in the airline so we would have the Dreamliner.” Thomson Airways became the first UK carrier to
operate the Boeing 787 14 months ago. Burling said: “We’ve carried 670,000 passengers on 2,500 flights since. In July we passed a milestone – since then, all long-haul Thomson flights have been on the Dreamliner. Flights from Birmingham, Newcastle and Edinburgh all started last month.” He added: “Our legroom on the Dreamliner is
better than British Airways’ or Virgin Atlantic’s to the Caribbean and, from November, we’ll offer a complimentary bar in economy on all long-haul flights.” Burling said: “We’ve added
a third weekly flight from Gatwick to Florida for next summer and a sixth flight to Cancun. We’ll have two more 787s arrive for 2015 and we’ll have announcements on new routes soon.” He added: “We’ve got the hotels, we’ve got the technology and we’ve got the Dreamliner.”
Burling: ‘We’ve
invested in the airline’
“Our scale gives us the
buying power to drive down prices”
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