‘Outstanding’, ‘performed extraordinarily’, ‘success’ and ‘confidence’ – all words used by Tui Travel chief Peter Long this week to describe its trading over the last 12 months.
In particular he was keen to laud the performance of its UK division which he told City investors was now among the top-performing businesses within the group.
Underlying profit margin of 6.5% is pretty good when you consider it was not so long ago that major UK tour operators talked of 5% as the Holy Grail.
In the immediate aftermath of Tuesday’s results, some commented that the announcement was rather staged-managed and included significant write offs as ‘exceptional items’.
But City analysts I spoke to this week appeared to be hugely impressed by what Long had to say and see Europe’s largest travel firm going from strength to strength.
All great news for Tui, but the results contained a passage that won’t have made for great reading if you’re a third party travel agent.
“By increasing the direct distribution of our holidays we lower distribution costs, reduce the reliance on third party distributors and can build on our customer relationships,” it said.
Continued success for Tui, while underling the resilience of the holiday market, is not necessarily something the wider travel industry can expect to share in.
Maybe a fast-reviving Thomas Cook, which showed its recovery was well on track last week, will consider third party support a more vital part of its strategy?
Never to a level indie agents should base their business on, however.
The one thing they can draw confidence from, is that Tui and Cook’s success creates a halo effect the rest of the sector, so reliant on buoyant consumer confidence, should be able to bask in.