TUI Travel to shut 100 high street travel agencies
TUI Travel plans to close 100 high street travel agencies in the UK. The group intends to increase cost savings by a further ?50 million to ?150 million a year. (1/30/2008)
As per the information available, tour operator TUI Travel employs more than 18,000 staff in the UK out of 40,000 across Europe.
TUI refused to put a number on the job losses, saying that the matter was "sensitive" and that the company was in consultation with staff.
The UK closures, which will be implemented over a two-year period, will contribute ?40m of the ?50m extra annual cost-savings from the merger. The remaining ?10m of savings will come from reducing overheads and increasing "product efficiencies" within the continental Europe business.
Gerry Doherty, general secretary of the TSSA travel union, warned that the closures could cost up to 1,000 jobs and result in less competition on the high street. He said: "We are seeking urgent talks with the company...but, given the number of shops and the offices facing closure in Crawley and Manchester, we could be looking at up to 1,000 staff losing their jobs."
The development emerged as TUI Travel PLC announced the results of the 100-day review and provided an update on its strategy following the completion of the merger between First Choice Holidays PLC and the tourism division of TUI AG in September 2007.
Peter Long, Chief Executive Officer of TUI Travel said, "The 100-day review has confirmed my initial view that TUI Travel will deliver superior returns for our shareholders. The integration of the two businesses is progressing very well and accordingly, we have upgraded our synergy target by 50% to an annualised ?150 million. We have now developed a clear vision and strategy for growth that goes beyond the delivery of the cost synergies. We will leverage our unique portfolio of market leading brands, grow our level of differentiated content and controlled distribution and optimise our business model to deliver organic growth. In our portfolio of specialist businesses we are aiming to continue to deliver a mix of strong underlying organic growth and value enhancing acquisitions. Current trading is encouraging, with consumer demand for holidays strong across our source markets, including the UK. Our market research clearly indicates that weakening economic performance is not a driver of consumer spending on holidays and this is being confirmed by our current trading results."