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Tui boosts activities and excursions, improves seasonal loss

The operator wants to raise its turnover and profit from transfers, activities and excursions, calling them a key growth area.

After reporting that its seasonal losses halved for the first quarter of its financial year, Tui Group says it wants to boost its turnover and profit from transfers, activities and excursions.

It identifies these in-resort extras, called Tui Destination Services, as a key growth area and plans to report on it separately in the tour operator’s future company accounts.

Customer Relationship Management (CRM) systems will be used to develop lucrative tailored products.

“Here, we see great potential to grow through the strength and comprehensive presence of the Tui brand,” said Fritz Joussen, group chief executive, in a conference call.

“We know our customers. Our customers know us, and they trust the Tui brand. This should help us develop more and better service offerings and generate additional turnover.”

Tui currently organises 4.6 million excursions and tours and 24 million transfers a year across 115 destinations.

The new focus on this revenue stream will be underlined by its appearance as a separate segment in the company reports, rather than simply being listed under the term Other Tourism.

A better loss
Tui Group is targeting 10% growth in profits for the full year after seeing turnover climb 8.1% to €3.55 billion for the first quarter, further improving underlying profits by 58.7% to a seasonal loss of €24.9 million.

For the northern region (Nordics, UK & Ireland, Canada, Russia), turnover grew 6.4% to €1.18 billion but underlying Ebita (earnings before interest, taxation and amortisation) was -6.1% to €-31.1 million.

Tui says the growth in earnings in the northern region is attributable to factors such as a good trading performance, use of the group’s own centrally launched yield management and CRM systems and migration from the UK’s local brand Thomson to the global Tui brand.

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