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Tui Group is seeking suitors for the 50-plus niche brands that no longer fit its asset- focused, vertically integrated model. The three bosses of Travelopia, the new name for Tui’s Specialist Group, spoke to Lucy Huxley

Chief executive Will Waggott (centre) with managing directors Martin Froggatt (left) and Mathew Prior

Tui seeks buyer for Travelopia

Ever since the merger between Tui Travel and Tui AG two years ago, there has been uncertainty over the Specialist Group’s future as it became increasingly clear it didn’t fit with the Tui Group strategy, according to Travelopia chief executive Will Waggott.

“When we did the merger two

years ago, the Specialist Group was called non-mainstream and we were managed for value. We made the decision to sell Hotelbeds a year ago, which has now been sold successfully, and there was an ongoing debate about what to do with the Specialist Group,” he said.

Tui strategy

“From a Tui perspective, the strategy was pretty clear. It is about the Tui brand, vertical integration and scale,” said Waggott. “So we started looking at the specialist businesses in that context and realised they aren’t scale businesses – all bar one [Crystal Ski] isn’t carrying more than 250,000 passengers and there is little, if any, vertical

“Since the merger, the Specialist Group is an even smaller part of a massive organisation”

integration. So the conclusion was that they really didn’t fit. “Even in the Tui Travel days the Specialist Group, with about 50 brands, was a small part of a very big business. So with the merger, we’ve become an even smaller part of a massive organisation.” Waggott said it had made sense

for Tui Group to sell non-core aspects of the business and reinvest the proceeds in areas that would drive greater group benefits.

Asset focus

“Things changed post-merger. Tui went from being asset-light to having lots of assets, whether it is 400-plus hotels or several cruise ships. When you move into a position like that where you’re spending more money on assets,

12 19 May 2016

then those smaller businesses are always going to be second best.” Waggott said the only exception within the Specialist Group was Crystal Ski because it was vertically integrated – 80% of its flying comes from Thomson Airways – and, with carryings of 275,000 passengers, also has scale. “We will miss Crystal, the

guys running it and the excellent feedback it got from customers, but it’s the right thing to move it into Tui UK & Ireland mainstream,” said Waggott. “If we didn’t delink it from the Specialist Group, we would risk the profitability of the Tui UK & Ireland mainstream business, and if we kept it, Tui would use those slots to set up its own ski programme and that would be the end of Crystal,” he said. “Our message to those staff

working for Crystal is a really positive one as they are going to work for, arguably, the most successful part of Tui Group. Tui will invest in Crystal and grow it.” Confirming that a consultation

period had started for some staff, he said: “This is a good news story but it’s an unfortunate outcome that there is still uncertainty for some, for the weeks ahead. “That said, we are hoping

there are no job losses. We will be splitting it down the middle: those who work mostly on ski will go with the ski business, and those who work mostly on the specialist businesses will stay with Travelopia. We will do everything we can to minimise – or ‘zero-ise’ – any redundancies,” he said.

Ski office

On moving Crystal Ski from its office in Surbiton in southwest London to Luton, Waggott said there were no immediate plans to relocate the business. “Nick Longman [Tui UK and

Ireland managing director] has made it very clear that we don’t want to lose the expertise in Surbiton and it’s incredibly important, where possible, to keep all those highly knowledgeable staff.” Asked if Crystal might have

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