Online growth continues for TUI, another big sell-off announced
European travel giant TUI Group continues to take more bookings online in the UK and Scandinavia. The headline news from TUI’s half-year results announcement is the decision to sell off its Specialist Holidays Group (SHG) business.
European travel giant TUI Group continues to take more bookings online in the UK and Scandinavia, confirming that even in mature ecommerce markets there is room for online travel to grow.
In the six months to end of March 2016, 57% of UK bookings were made online – a 3% increase on the same period last year. For reference, TUI had a total of more than one-and-a-half million UK customers in the period.
The Nordics has always been TUI’s strongest online region and continues to grow from a high base. Online accounted for 71% of bookings, up from 69% last time. Volumes however are relatively low at just shy of 600,000 customers.
Its Benelux region is comparable to the UK in terms of passenger numbers, although online lags slightly at 56%, still up from 54% last time.
The only blot on the online landscape is its German business, by far its biggest source market with more than two million passengers using TUI in the half. Online however only accounted for 14% of the bookings, the same proportion as last time.
Across these four main markets, online accounted for 43% of bookings, up from 41%.
Looking ahead, online is also up for the peak summer season, accounting for 39% of bookings so far across the four markets compared with 36% at the same stage last year.
The headline news from TUI’s half-year results announcement is the decision to sell off its Specialist Holidays Group (SHG) business, a mixed bag of niche and specialist B2B and B2C brands which TUI is dropping because it “sees limited linkage to our content-centric, vertically integrated model, and limited ability to scale with our global platforms such as the TUI brand.”
One of SHG’s strategic drivers is “digital by default” and many of the B2C brands within the portfolio are basically “dynamic packaging” and “tailor-made” businesses. Or, as the OTAs might say, “flight + hotel” businesses.
Brands include Hayes & Jarvis, Sovereign Holidays, Citalia and Austravel serving the UK, American Holidays serving Ireland with MyPlanet and MarcoPolo for Scandinavia.
TUI wants to sell these businesses in one go and the sales effort will begin in earnest this September.
A year ago, TUI’s Peter Long said that “the world and his wife” wanted to buy SHG. Without reading too much into a throwaway comment, the world might be where SHG ends up.
India’s Cox & Kings already has TUI’s disposal department number on speed-dial after buyinglaterooms.com, while there were reports of a Chinese travel firm getting onto the shortlist forHotelbeds.
There’s probably too much offline baggage within SHG for a pure-play OTA to be interested, and its cash generating ability – turnover of €850 million in the Oct-March quarter – means it will pique the interests of some VCs.
But any overseas business which wants to expand into the UK and Europe, via a portfolio of established brands with a B2B/B2C/online/offline make-up, might also take a look.
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