New mainstream structure helps boost TUI’s Q3
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TUI Travel has announced a 21% increase in underlying operating profit for the third quarter as demand for its exclusive holidays rises and its sees the benefits of a new structure for its mainstream business.
The profit of GBP92m on a like-for-like basis came as the company said it was ‘pleased’ with summer 2014 trading, with 88% of holidays sold with higher average prices in the mainstream business.
Its UK business saw underlying operating profit rise 17% although bookings dipped 1%, while the German business’ profit increased 16%.
Sales of its unique holidays are up 3% to now account for 71% of its bookings, while the specialist and activity arm more than doubled its operating profit from GBP6m in Q3 2013 to GBP14m in Q3 2014.
More than half of the company’s bookings are also now made online, with a 4% boost to 51%. Its bedbanks and OTAs have also seen continued growth.
“We are pleased to have delivered another strong performance this quarter across the Group with a 21% increase in underlying operating profit. Demand for our unique holidays, which now account for over 70% of summer sales, has continued to grow, as have bookings made online. Our One Mainstream structure, led by Johan Lundgren, continues to yield tangible benefits across a number of areas as we drive the organisation to deliver a performance similar to that achieved by our UK business,” said Peter Long, chief executive of TUI Travel.
He added: “We remain pleased with progress in summer trading, despite strong comparatives, and are achieving higher average selling prices across mainstream overall.
“As the trading environment in the commodity space has become more competitive and airline capacity continues to increase, our flexible and resilient business model – focused on unique holidays and our relationship with the customer throughout their whole holiday experience – enables us to deliver sustainable, profitable growth and out-perform the market.”
Forward bookings show a 3% rise in sales and selling prices for the up-coming winter season, of which 23% is sold. TUI also reported a ‘strong start’ to UK trading for summer 2015.
TUI is currently in talks with TUI AG over a merger of the two, with a decision to be announced by 17.00 on 19 September.
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