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The signals are set for growth again at TUI

After a long difficult period, things are gradually improving again. This is how the head of TUI, Dr. Michael Frenzel, commented…

After a long difficult period, things are gradually improving again. This is how the head of TUI, Dr. Michael Frenzel, commented at ITB in Berlin on the current situation of Europe`s largest tourism group.

After two difficult years with appreciable declines in bookings, Frenzel added that the signals are again set for a return to growth. In the ongoing winter business, the TUI Group reports European-wide growth of booked turnover of 6.1 per cent and a rise in customer numbers of 6.4 per cent.

After a weak start to the summer business, there are now clear signs of an upturn. And coinciding almost exactly with the start of the world`s largest tourism exhibition, booked turnover moved above the line with an increase of almost 1 per cent, whilst customer numbers now virtually match the previous year`s level. Booked turnover for combined winter 2003/2004 plus summer 2004 season amounts to 3.3 per cent in comparison with the previous year.

Particularly satisfactorily is that the German market which had recently been especially difficult is now gradually recovering. In the ongoing winter season, TUI reports an increase in customer numbers here of 7.9 per cent. Lower prices in the brochures means that the growth in turnover at 2.2 per cent is less marked than the rise in customer numbers.

The summer season, which is much more important for the business year overall, is also now generating positive results.

After falling clearly behind the previous year`s figures in November and December, we have been catching up strongly week by week since the middle of January, explained the head of TUI Deutschland Volker Bottcher in his business presentation. Booked turnover is currently up almost 1 per cent year-on-year whilst customer numbers have even increased by 3.1 per cent.

The biggest rise amongst German holidaymakers in summer 2004 is enjoyed by North Africa and the Eastern Mediterranean – precisely those holiday destinations which suffered most last year from the effects of the Iraq war. The absolute shooting star amongst the summer destinations at the moment is Egypt where the growth in customer numbers of 250 per cent is currently breaking all records.

Turkey is also again enjoying a boom this year where the increase in customer numbers of 21,8 per cent brings it back into line with the success it has been used to in the past.

Other chart-toppers for German holidaymakers include family clubs around the Mediterranean, on the Canary Islands and in the Black Sea; all-inclusive holidays; wellness holidays and city breaks; and holidays in Mexico and North America – favoured by the attractive dollar exchange rate.

TUI`s business outside of Germany is also recovering. Satisfactory growth in turnover for the 2004 summer season is reported by TUI subsidiaries in the UK (+7.2 %), Switzerland (+8.1 %), Scandinavia (+4.1 %) and France (+1.4 %). The upturn has not yet had an impact on Group subsidiaries in Belgium (-1.9%), Netherlands (-7.5 %), Austria (-12.2 %) and Ireland (-29.7 %).

A particularly positive aspect is the stable development in the UK market which is by far the most important for us after Germany, said Frenzel. An additional boost is promised in particular by the new low-cost carrier Thomsonfly scheduled to start in April which should increase the seat-only business. The complete take-over of Coventry airport with its strategically favourable location gives TUI its own home airport for the new fleet which has tremendous opportunities for growth.

Despite a considerably more promising outlook on the travel horizon, Frenzel warned against becoming too euphoric. The travel sector still has to face exciting and difficult months ahead. I am not exactly euphoric, but I am satisfied and very confident of the upturn, was how Frenzel assessed the current situation.

Theodore Koumelis
Co-Founder & Managing Director - Travel Media Applications | Website

Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.