TUI

November 15, 2010

Growth with more exclusive hotel brands

TUI has unveiled two more exclusive hotel brands, ‘Puravida’ and ‘TUI Best Family’, to generate growth in summer 2011.

Alongside established hotel brands such as Riu, Iberotel, Grecotel and Robinson, TUI Germany is developing more exclusive product lines. Following the launch of Sensimar the German market leader has unveiled two more new brands for next summer.

‘Puravida’, with two resorts in Belek and on Kos, is targeted at “the growing target group of experienced travellers aged between 30 and 50”, managing director Volker Böttcher said. The four- and five-star Puravida properties will include a large spa area and at least three a la carte restaurants. TUI aims to have at least 15 resorts operating under the new brand by 2015, including on other continents and at self-drive destinations. The main difference to Sensimar is that Puravida hotels will target both families and single travellers, with separate areas within the hotel for relaxation or for activities.

TUI Germany chief Volker Böttcher in Istanbul.
Foto: Christian Wyrwa

The second new product line, TUI Best Family, is a re-branding of the existing ‘Schöne Ferien’ clubs. In future, all 29 resorts will the same product standards, including all-inclusive, German-language activities for different age groups, family rooms, large pools and fixed prices for at least three children.

At the same time, Sensimar will double to ten properties with five new hotels in Greece (Crete and Kos), Turkey (Belek and Kemer) and on Majorca. With occupancy rates of more than 80% and customer satisfaction of over 90%, Sensimar is “extremely successful”, Böttcher said. The brand is targets at “comfort-oriented middle-aged couples”. There are also five new Riu hotels on offer, and TUI Germany is taking over responsibility for the Magic Life clubs.

“Hotels that are specially focused on the needs of particular target groups are the driver of our success,” Böttcher commented at the summer 2011 brochure presentation in Istanbul. Like other operators, TUI aims to use the branded hotels to differentiate itself and to achieve higher margins. More than 60% of revenues in short- and medium-haul destinations are already generated by exclusive products, according to the TUI Germany chief. In total, TUI will have 5,000 more exclusively offered hotel beds in short- and medium-haul destinations in summer 2011.

Prices for next summer are impacted by the new flight departure tax along with higher hotel rates in popular destinations such as Turkey and Egypt, and unfavourable exchange rate effects and higher fuel prices for long-haul destinations. Short- and medium-haul destinations will be 2.5% more expensive on average next summer, including increases for Italy, Greece, Egypt, Turkey and the Canary Islands, but Majorca will be 1% cheaper. Long-haul holidays will go up 3.5% on average, including a 4% rise for the USA but the Caribbean will have constant prices. Böttcher reiterated his criticism of the flight tax as “nonsense”, especially for long-haul holidays with an average increase of €50 per person.

TUI Germany is targeting “a strong bookings increase” next summer despite the focus on margins ahead of growth. Flight capacity will be expanded by 6%, although the bulk of this will be based on flexible contingents with third-party carriers. “I am optimistic for the winter and summer seasons. The figures confirm that our focus on product differentiation, quality and innovation will pay off,” Böttcher stressed.

This summer TUI generated a 5% rise in customer numbers and a 3% increase in revenues thanks to strong business in July to September and a higher proportion of holidays sold at normal brochure prices. The proportion of last-minute sales fell, which is likely to have a positive effect on the company’s profits. Winter 2011 business has started well for TUI Germany. Bookings were 10% higher as of mid-October, although this is in comparison with a weak start to winter sales 12 months ago. Long-haul sales are up as much as 30%.

Meanwhile, Böttcher stressed TUI’s determination to double its owned travel agency outlets from 400 to 800 over the next few years, with some 70-80 acquisitions a year. But no major tour operator acquisitions are planned following the purchase of 49% in Australia specialist Boomerang. “We don’t want to buy any me-too operators but mostly grow organically,” he said.

German consumers are getting increasingly environmentally-conscious in their holiday planning, according to TUI research. A representative consumer survey found that “environmentally friendly hotels” were more important for 74% of Germans than an attractive price (71%). Moreover, 24% of Germans could imagine using part of their annual holiday for a social or environmental project in another country, while 8% would be ready to make a voluntary CO2 compensation payment for holiday flights.

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