Tui Travel has claimed it is “significantly outperforming” the market in the UK as it revealed its third quarter performance today.
In a trading statement the UK’s largest travel firms said 2012 late business had been “very encouraging”, although revenues were down 2% and operating margin 0.3 of a percentage point.
Operating profit for the quarter was also down 16% to £74 million, something Tui said reflected the timing of the Easter holidays this year.
Tui reported growing demand for differentiated product and claimed this, plus a focus on online bookings, has seen distribution through its own channels grow six percentage points to 90%.
Peter Long, chief executive of Tui Travel, said: “We are pleased with our performance, driven by our strategy of differentiated and exclusive product with a focus on online distribution. We are significantly outperforming the market in the UK.
“Summer 2012 volumes have improved in most key markets since our last update. We are seeing strong demand and lates margins for the peak Summer period. Our Winter 2012/2013 programme has had an encouraging start.
“We are confident of exceeding our full year expectations based on like for like exchange rates, however, the impact of retranslation of fourth quarter Eurozone profits at current exchange rates leaves us to believe we will perform in line with our expectations for the full-year.”
Tui reported increased demand for differentiated product saw this segment of its business represent 63% of the total, up seven percentage points on the previous year.
This trend was even more marked in its Nordic markets where that figure stood at 76%, up five percentage points.
While the UK market as a whole is outperforming Tui’s other key source markets in Europe, the firms said France “continues to underperform our expectations in a very challenging market”.
Tui said it has 12% less left to sell in the UK now than at this time last year and that volumes were coming in above the 6% capacity reduction it has implemented this year.
Its update added that average selling prices were up 9% and that it was also seeing improved load factors.
The statement said: “In the UK, our strategy of focusing on differentiated and exclusive product distributed increasingly online is delivering superior performance.
“Differentiated products now account for 63% of holidays sold to date, up seven percentage points on the prior year. All inclusive products make up 52% of all holidays sold so far for Summer, an increase of six percentage points on the prior year.
“Online sales continue to grow, accounting for 45% of Summer 2012 holidays booked, up by five percentage points on the prior year. As a result, 90% of holidays booked so far this Summer have been through controlled channels, up six percentage points on prior year.”