P12-13 Peter Long apr10 7/4/09 21:21 Page 12
news interview
ttglive.com
Interview Peter Long, Tui Travel
collapse in the holiday market like there has
I’m not gung-ho but
in car sales, and Tui’s average selling prices
are up by 10%.
“There’s been a collapse in car sales because
there’s no financing for cars. If you want to
borrow, you can’t because the banks are
clogged up. But we’re not talking the same
I’m not despairing
amount of money for holidays – you don’t have
to go into debt to buy a holiday.
“The fear of unemployment is the biggest
factor. If you’re out of work or you have a fear
of being made redundant, that may stop you
spending on a holiday. But 20-25% of capacity
Tui Travel’s chief executive may have other people to take care of
has been taken out of the market from 2008 to
social networking, but he’s on the frontline in the race to lead the
2009, and that’s more than enough to cover
travel pack out of the recession. Peter Long talks to Lucy Huxley
those that aren’t going to travel this year.”
Hedging strategies
Long says Tui started dealing with the big
issues a long time ago. “We’ve seen the impact
S
ocial networking is all the rage in of us just retrenching. Now there are two of factors such as high fuel prices on the
travel circles right now, so does Peter international organisations competing and smaller tour operators such as XL, but we
Long, chief executive of Tui Travel, one building brand loyalty. took out a lot of capacity because we could
of world’s largest travel organisations, “But we are not driven by egos to do rationalise after bringing the two businesses
blog, Tweet or use Facebook or LinkedIn? irrational things. We are going to improve together – and Cook had a similar strategy.
“Look around my office – what do you returns for our shareholders by providing “So we’ve got less capacity in the market and
notice?” he asks me. consumers with better holiday experiences.” even the airlines are saying for the first time
In a flash, I realise Long’s new office in Long believes Tui is now in a “fantastic they’re going to take capacity out or not grow.
Crawley has no computer. Not only that, but he position” because of its size and scale. “It won’t be an easy journey but the core
reveals he doesn’t send a single email – though But he stresses: “We need to be of our customers are still going to go on
his lack of use of them doesn’t mean he has an planning for when we come out of holiday. We have fewer holidays left to
aversion to technology or new media. this, and for five years on. sell than last year so we’re not going to
“I don’t function by email and I’m not a slave “From packages being a product in have to trade our way through on price.
to social networking or digital communication. decline, we now have an opportunity “Our holidays are the best option now.
But I’m no Luddite; it’s fantastic for our business to regain ground lost to the low-cost The price we bought our dollars and euros
and I have experts who embrace it,” he says. carriers by promoting our choice, at is much better than now, so it’s better to
“I’m happy for our customers to critique our flexibility and unique product. buy with us, rather than from a website where
holidays; if you’re a company with a poor “There is a great opportunity to they are buying at spot rate. Why buy at
offering and poor service, you’ll be rumbled by really build brand loyalty and spot or tourist rate when you
this kind of interaction. But getting accredita- capitalise – just reining can pay less?
tion from other holidaymakers is the most back and cutting costs “So I’m not gung-ho,
efficient way to market our product, so social is being business- but equally I’m not
networking plays to our strengths.” efficient but it’s not thinking ‘Oh God,
a strategy.” what next?’”
Maturer industry
Long believes consolidation between First Consumer Spanish
Choice and Tui Travel has put the business confidence negotiations
– and the whole travel industry – in a much Long believes Asked about the group’s
better position to weather the current storm. that more decision to delay summer
“As an industry, we had oversupplied and customers 2010 programme launches
managed the business badly because returns have got from May to July 2, Long
were very low, and when you consider the risk more money says: “Why stimulate demand
we take, it was all out of balance,” he says. because of for holidays for next year, before
“Industry behaviour is now maturing. We interest rate you’ve been on holiday this year
are much more efficient and we have greater cuts, but they are a and when there’s a difficult
scale and financial strength. This allows us to bit more uncertain. economic environment?
compete against the low-cost carriers. He stresses there “So we’ve said let’s wait. It
“Before, there was a real danger of the four hasn’t been a gives us time to renegotiate.
12 10.04.2009
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