"Despite the financial crisis and the economic downturn I am confident about our business prospects“, said TUI Deutschland Chief Executive Volker Böttcher at the presentation of the new summer programme in the Moroccan holiday resort of Agadir. Even in difficult times holidays enjoy a high preference; before cutting back on their holidays German consumers would rather put off other major outlays, continued Böttcher. Nevertheless for the holiday summer of 2009 TUI Deutschland has planned its capacities conservatively so as not to come under any marketing pressure should demand drop. “We will not become involved in a price war. Indeed, we want to sell exclusive, good quality products above all from our non-discounted holiday brochures," said Böttcher.
Winter business up on previous year
TUI Deutschland is satisfied with the way its winter business is presently developing. By allowing bookings to be made four weeks earlier than usual an excellent early-booker business resulted for the company, however, the introduction of a kerosene surcharge in mid-August resulted in this slowing. Demand continues to show that people keep wanting to go on holiday.
Winners and losers
The trend towards premium holidays is continuing also in the current winter season. TUI Premium, the high quality package holiday offering of the market leader, is presently enjoying an increase in revenue of 13 percent growth. Also the more expensive holiday destinations such as the Seychelles, Maldives and the United Arab Emirates are continuing to gain this winter. The strong demand for holidays in North America continues unchanged owing to the favourable Euro-Dollar exchange rate. Mexico and the Caribbean are also up on the previous winter. On the other side, demand has dropped for long-haul holidays to Thailand, Kenya, South Africa and China. Whereas tourism to China is still suffering from the effects of high prices and the strict security precautions during the Olympic Games, other nearby destinations are still feeling the effects of the unrest in the country. There is a quite different picture in the Cape Verde Islands for which there is steadily increasing demand. Here TUI has with its hotel partner Riu opened its third own hotel within a short time and continues to take the leading role for the German holiday market in pushing forward the development of this new and upcoming holiday region. Despite all the talk about global warming the demand for winter sports holidays in the traditional snow destinations of Germany, Austria and Switzerland continues unabated.
First class into the summer holiday
To give its customers even more certainty when planning their budgets in these economically difficult times, TUI has enormously expanded its all-inclusive offering in the new summer brochures. “In summer 2009 more than every second Mediterranean package holiday sold will be an all-round carefree package,“ announced the TUI Deutschland Chief Executive. And to increase the “resistance to crisis“ the percentage of high quality products has been increased. 85 percent of TUI’s overall bed capacity next summer is placed in the four and even five star segment. “I am convinced that there’s a market for good and exclusive products even in difficult times,“ said Böttcher. To celebrate its 40th anniversary this year TUI is offering its customers something special. On the one hand there is an anniversary bonus with discounts of up to 200 euros per person in well over 100 hotels, and on the other there is a “Train to Plane“ upgrade, which allows all package holidaymakers throughout Germany to travel by 1st class rail to their chosen departure airport without having to pay anything extra. Previously this service was available only for 2nd class travel.
More exclusiveness and individuality
The new TUI hotel brand of Sensimar that was announced just a few weeks ago starts up business in summer 2009 in the first place with three hotels on Crete, Rhodes and in the Turkish resort of Side. The high quality four and five-star properties have been designed exclusively for the German holiday market and specifically target couples looking for a high level of comfort. “To ensure we achieve the high quality standard we have intentionally set a moderate level of expansion for Sensimar,“ stressed Böttcher. Over the next four years up to a further 15 hotels are to be opened with selected franchise partners.
TUI has expanded the product range aimed at the more individual holiday wishes by adding holiday homes and houseboats. For the first time some 18,000 holiday homes and apartments are being offered under the TUI brand. The product offering ranges from luxury villas in St Tropez to caravan parks in Spain. Together with the provider Le Boat, the biggest specialist for houseboat holidays in Europe and part of TUI Travel PLC, holidays are on offer which give people their own boat without the need for a special licence so they can sail on the most attractive inland waters of Europe. At 40 points of departure in seven European countries holidaymakers can chose from some 50 different types of boat. The boats range from the simple, functional houseboat to luxury yachts.
The modular holiday offensive that TUI started this winter continues. Almost the entire hotel offering in medium haul is now available for booking in package form as well as individual holiday components. For individualists the product range is supplemented by the new TUI Weltentdecker Mediterran (TUI World Discoverer Mediterranean) brochure offering various holiday components.
Price situation
As a result of the higher energy costs and the price increases for food, holidays next summer will be more expensive. On average the price of TUI holidays are up by four percent. Prices for long-haul holidays in summer 2009 increase very inconsistently, holidays by car increase by 1.6 percent.
More early-booker offers TUI has extended the range of early-booker offers and children’s fixed prices. The XXL bonus for early-bookers is available next summer in 200 hotels at medium-haul destinations and at xx properties at long-haul destinations. The deal offers guests savings of up to 180 euros per person and applies to bookings made on or before 28 February. XXS children’s fixed prices are available for as little as 99 euros. In total there are 75.000 price-reduced holidays for children. Again, to obtain the reduced price the booking must be made by the end of February. Highly priceconscious customers will be pleased to choose from the 150,000 best-price rooms on offer – more than ever before. In this case the guest leaves the room choice to TUI and receives a price reduction of about 15 percent.
Outlook
"We are starting off the summer holiday season with a great product assortment; we have raised the exclusivity, the individuality and the quality of our offering and as such have clearly stated our position. At the same time we have practised restraint in planning our capacities and can react flexibly to fluctuations in demand," said Böttcher. "Considering our brand strength and the high preference given to holidays I am confident for the summer season, despite the economically difficult background conditions," continued Böttcher. To put our new summer programme on the market with the appropriate advertising support, TUI will start a national advertising campaign with Joachim Löw as the official TUI holiday consultant on 15 November.