TUI’s forward bookings for the UK market in 2011 are 5% up – but those for its exclusive holidays are 17% ahead.
Johan Lundgren, the new managing director for TUI UK & Ireland, told an audience of travel bosses at World Travel Market – the premier global event for the travel industry – that he was cautious about 2011 but the push towards differentiated products was paying dividends.
Thomson’s Sensatori resorts and First Choice’s Holiday Villages are among the exclusive ‘unique hotel experiences’ that now comprise half of TUI UK & Ireland’s offering.
Interviewed by Michael East, managing director of Eastcastle Management Group, Lundgren told the Captains of Industry lunch at World Travel Market that these unique offerings make TUI less dependent on the changing fortunes of different destinations, as customers will ask for a Holiday Village or Sensatori resort.
“We are accelerating our strategy of differentiation. We are not in the commodity business – we want to produce something that is unique,” he said.
TUI’s scale also means it is able to have more control over what resort hotels can offer, in terms of food, entertainment and children’s clubs.
Capacity for 2011 is flat or slightly up but can be easily increased if there is demand in certain areas, he said.
And despite his cautious outlook, he said there are opportunities for the travel industry as people will travel more in 2011.
One reason for more stability was the fact the Government has now unveiled its cuts, and he added: “Uncertainty is probably a bigger obstacle than the obstacle itself.”
Commenting on the merger between rival Thomas Cook and The Co-operative Travel retail chain, he said TUI was happy with its rate of inhouse sales, which sits at about 77-78%.
It means there are about 20% of its holidays which are sold by third-parties, giving TUI brands more flexibility and a presence in other areas.
Lundgren – who is also managing director of TUI’s Northern Region – held his hands up about the recent £88m write-off of irrecoverable balances, resulting from the integration of its IT systems.
“It is absolutely unacceptable, you hate this. It was a failure from our side to reconcile and spot it,” he said.
