Tui Travel announces profit increase

Tui Travel, which merged with Thomson Holidays last year, has reported a 39 per cent rise in their operating profits.  The profit rise reversed the trend of shrinking profits being reported throughout the travel industry.  They have been able to achieve this increase in operating profits by scaling back their capacity and not by reducing prices on holidays.

It is expected that they will reduce capacity for their winter schedule by around 20 per cent.  For next summer Tui Travel is already planning to reduce capacity by around 15 per cent.

The chief executive officer for Tui Travel, Peter Long, has said of the customer demand Tui is experiencing “Our customers continue to place enormous value of their holidays and we are seeing no evidence to suggest that demand is slowing for any of our seasons on sale.”

Long spoke of their average customer: “Some people are in debt, but our customer base is the good, hard-working people from middle England. They work hard, save and put money away each month.

“The underlying demand is there.  There is no way we’re starting a price war. We don’t need to. Like-for-like holiday price increases are closer to 6pc.  The overall increase is a result of customers trading up,” Long added.

Rival UK travel company, Thomas Cook, is also reporting an increase in their profits. The chief executive officer for Thomas Cook said of the profit increase “People are cutting back on cars, clothes and white goods; the last thing they cut back on is their holiday.”

www.tui-group.com

www.thomascook.com