Summer lates boost keeps Tui Travel on course

Sep 22, 2011 07:50AM GMT

A strong performance in this summer’s lates market has helped Tui Travel keep on course to meet its full year expectations.

Improved margins for late sales in the UK and Germany have helped boost Europe’s largest travel group. Winter 2011/12 trading to date is described as “satisfactory” overall with differentiated holidays performing well, particularly in the UK and Nordic regions.

Winter capacity has been cut by 7% from the UK to Egypt and Tunisia following political upheaval in North Africa. This has helped push the average selling price up by 6%, also reflecting higher fuel and accommodation costs.

Differentiated holiday sales are up by 7% year on year while the percentage of online sales has grown by three percentage points to 37%. The group has sold 10% of it summer 2012 programme from the UK, described as being broadly in line with last year.

Bookings are currently 11% down, partly reflecting a 4% drop in capacity, while average selling prices are up by 10%.

“Margin performance is a key driver for the group. We anticipate that in the UK, cost inflation will be just over 5% for summer 2012 and our prices are designed to recover these input costs in this competitive market,” the company said in a trading update today.

Chief executive Peter Long said: “We are pleased with our performance in the lates market for summer 2011, and most of our programmes are now almost fully sold.

“We remain confident that the full year results will be in line with our expectations. Trading for winter 2011/12 is satisfactory overall, but we are anticipating a slow recovery in trading to Egypt and Tunisia, and have managed our capacity accordingly.”

He added: “Our focus remains on differentiated product, maintaining margins, prudent capacity management, and delivering our turnaround and cost savings programme. The flexibility of our business model means that we are well placed to achieve this.”