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NEW TUI UK managing director Peter Rothwell is conducting a major
review of the business with a view to saving around £25
million, Travel Weekly has learnt.
Details of the cost cuts will be revealed to staff in the coming
weeks, but job losses across the company are rumoured.
Rothwell, who retains his role as chief executive of TUI northern
Europe, takes the more ‘hands on’ role of managing
director following the sudden departure of Chris Mottershead on
Monday.
A spokeswoman for TUI UK confirmed a business review was under
way.
“Peter will look at lots of things and staff will know more
soon.”
Mottershead’s decision to leave came after a seven-week
sabbatical for a holiday the company claimed had been planned
since he started with TUI at the end of 2001. The break, during the
peak period, led to widespread speculation Mottershead would not
return.
“I got to the stage where I wanted to try something
different,” said Mottershead.
He refuted rumours he’d been made a scapegoat for Lunn
Poly’s aggressive January discounting – rumoured to
have gone £4 million over budget – or that he failed to
cut enough capacity. He also denied rumours there were shortfalls
in this year’s targets for TUI UK.
“We’re as close to being on target as we can be and the
summer’s pretty strong. When your target is £100
million, being £4 million over is rather small,” he
said.
“We haven’t had to cut capacity too much – there
has been plenty of demand; prices and yield this summer have
demonstrated that.”
Mottershead said a review of the business now “made
sense”.
“We’ve had a pretty good summer but Peter will want to
have another look,” he said.
Observers, however, say Mottershead’s departure immediately
after his sabbatical has left the company with egg on its
face.
“They made themselves look very foolish and they’ve
lost credibility internally,” said one.
Another source close to the company said further cuts were
inevitable.
“The big four have to review their overheads and the biggest
costs are salary related. The cuts will come over a period of time
and will be across the board.”
Mottershead joined TUI UK in 2001 from Airtours in Canada. He said
his future plans include working with venture capitalists and
admitted he would look outside the travel industry.