TUI Deutschland: presentation of summer brochures 2006 TUI Deutschland records 5.3 per cent growth in turnover / Announcement of numerous product innovations for the 2006 summer / Current winter season matches last year’s levels / Slight increase in tour prices in the 2006 summer due to high prices of aircraft fuel
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Hanover/Varadero, November 7, 2005
TUI, Germany’s leading tour operator, has completed the 2005 summer season with substantial growth. At the end of October, TUI recorded year-on-year turnover growth of 5.3 per cent, with customer numbers up 14.7 per cent. ‘We are highly satisfied with our performance in the summer season. Despite the terrorist attacks and natural disasters, we have generated very robust growth’, said Dr. Volker Böttcher, head of TUI Deutschland, at the presentation of the 2006 summer brochures in Varadero/Cuba. Following an initially good start, the development of bookings for the 2005/2006 winter season, which started two weeks ago, has meanwhile slowed down. Booked turnover by the German TUI tour operator brands currently matches last year’s levels, with customer numbers exceeding last winter’s levels by 6.2 per cent. Böttcher gave a number of reasons for this trend, including the terrorist attacks in Sharm-el-Sheikh and the consumer restraint observed to date, with consumers adopting a wait-and-see attitude due to the lack of clarity concerning the political situation immediately after the federal German elections. For the 2006 summer season, Böttcher announced a fanfare of product innovations, a slight increase in tour prices due to the development of the oil price, and notable turnover growth.
Slight increase in tour prices as oil prices strike record levels
As Böttcher pointed out, prices of holiday tours will rise slightly due to the persistently high oil prices in the 2006 summer season. He explained that the price of aircraft fuel was 470 US dollars per tonne around one year ago. ‘Today, airlines have to pay 620 US dollars per tonne, a 30 per cent increase’, said Böttcher. This trend is reflected in tour prices. Average holiday prices for all TUI brochures will therefore rise by around 2.3 per cent next summer. The head of TUI Deutschland pointed out that holidaymakers can compensate for the slight increase in prices by means of early booking discounts and other special offers. Individual holiday destinations show varying trends. Tours to the Balearic Islands, by far the most important German holiday destination, will only rise by one per cent. Prices of tours to the Canary Islands, Morocco and Portugal will increase by three per cent. Tours to long-haul destinations such as Cuba and the Dominican Republic will rise by five per cent due to the high share of flight costs as a proportion of overall tour prices. In the framework of the early booking strategy, holidaymakers able to take quick decisions can achieve substantial savings, e.g. up to 189 euros per person at the Esperanza Mar Hotel in Majorca in the holiday season. In addition to the classic early booking discount for tours booked before 31 March, 2006, TUI has considerably extended the exclusive 60-day-price discount. This benefit is now offered by 600 hotels in 25 destinations.
Winners and losers in the 2005 summer
This year, the winners in the 2005 summer season include Majorca. ‘The Germans’ favourite island concludes the season at a nine per cent increase in customer numbers’, said Böttcher. The Canary Islands, another traditionally important TUI destination, also grew by four per cent. The kingdom of Morocco currently experiences a genuine boom. Böttcher: ‘We wanted to get Morocco out of its long hibernation and have impressively succeeded in doing so.’ At an increase of 31 per cent in customer numbers, Morocco is virtually outperforming all Mediterranean countries this summer, with Italy being the only country to achieve even stronger growth (+40 per cent) due to a significant increase in the number of flight destinations in TUI brochures. A positive trend was also recorded in Portugal (+8.5 per cent), Cyprus (+23 per cent) and the self-drive tour countries Germany (+20 per cent) and Austria
(+39 per cent). Among the long-haul destinations, the US (+43 per cent) and Kenya
(+63 per cent) reported the highest growth rates.
The losers in the 2005 summer season include Egypt. Bookings dropped significantly against the background of the terrorist attack in Sharm-el-Sheikh. Customer numbers declined by ten per cent year-on-year. ‘At least, unlike in past events, demand has not collapsed completely this time’, said Böttcher. ‘Germans have adopted a new kind of realism in facing terrorist attacks and natural disasters. Whereas destinations had to be deleted from the tourism map for a year following a grave event, the aftermath of such events is much less severe today.’ Böttcher expressed his optimism concerning the future development of Egypt: ‘Bookings are now picking up again. Based on week-on-week comparisons, we are currently growing in the double-digit percentage range in between the Nile and the Red Sea.’ Bulgaria also failed to continue its past success, recording a decline in customer numbers of around 14 per cent. The holiday destinations affected by the tsunamis showed different trends. While Sri Lanka suffered from a 37 per cent drop in customer numbers, the Maldives completed the summer season only at a loss of 11 per cent. Thailand has meanwhile compensated for initial losses and matches last year’s levels at the conclusion of the 2005 summer season.
Announcement of a fanfare of product innovations for the 2006 summer
season
For the 2006 summer season, Böttcher announced a host of innovations. The numerous product innovations for the 2006 holiday summer include three sports brochures, river cruises, self-catering programmes and TUI Vital tours co-sponsored by health insurance schemes. Moreover, TUI tours will come at lower prices than ever before during the Soccer World Cup. Attractive savings options and special offerings for every soccer target group – all the way from hardcore supporters to soccer antagonists – ensure the ideal interplay of soccer and travel. Overall, TUI customers will be offered far more than 10,000 offerings in 45 brochures and more than 80 countries around the world.
Prospects for 2006
For the current 2005/2006 winter season, TUI Deutschland expects slight market growth. ‘We got off to a good start into the season due to our early booking campaign. However, the market has run out of steam since late summer’, said Böttcher. He therefore expects TUI to record slight growth by the end of the winter season. For the 2006 summer season, which plays a more important role for TUI’s business, Germany’s leading tour operator expects more significant growth. ‘I expect turnover to rise by four to five per cent for the summer, with moderate capacity planning.’ In explaining the reasons for these positive prospects, Böttcher said: ‘All the autumn reports by the economic research institutes and the latest consumer climate survey conducted by GfK, the German consumer research institute, forecast growth and an increase in consumers’ propensity to consume’. Böttcher pointed out that all of these reports were prepared following the start of the coalition talks in Berlin, reflecting an improvement in consumers’ fundamental sentiment. ‘Once the new government will be in charge, many people will also change their wait-and-see attitude. And moreover: ‘There are sufficient reasons at the moment to be optimistic about the coming year.’
Further information and pictures to be downloaded are available on the internet at www.tui-deutschland.com.
For further information please contact:
Björn Beroleit, phone +49 511 566-1310
Nicola Gehrt, phone +49 511 566-1435