The merged Tui Travel and TUI AG business will run its mainstream and non-core specialists divisions entirely separately but not with the intention of selling the latter, the firm confirmed.
Speaking to investors and analysts after the announcement that the German and UK firms will merge to form a huge integrated tourism giant, Tui chief executive Peter Long said it would look to grow value in it non-core businesses.
These include its “market leading” online accommodation division and its specialist and activities group of business which will be run by chief executive Will Waggott.
The third non-core division is the 22% TUI AG in the Hapag Lloyd container shipping business which the company will sell as it strives to focus on being purely a leisure company.
Long said: “Non-core is non-synergistic. By grouping these businesses and supporting them gives us focus, it simplifies our business.
“What we are not alluding to at the moment is that we are going to sell them because we are not going to sell them, we are going to look at ways to create value.”
Friederich Joussen, who will become joint chief executive of the merged company until February 2106 when he will become the sole chief executive when Long becomes chairman, said:
“Our B-B online business is potentially a world leading opportunity, but it’s not differentiated. It has superior margins but it’s not important to be run under the umbrella of mainstream.
“Mainstream is our big engine. The other businesses are to be managed for value.”
Long added: “There are many ways which you can add value. At this point what we are saying is we have the merged core business which is integrated mainstream and we have some other very good businesses and we will be creating value.”
“It’s not like we do not like them, it’s just they are different,” added Joussen.
The merged Tui will have 98 brands in its non-core including OTA laterooms.com and bed bank Hotel Beds, while the core business has just eight brands.
The core businesses recorded £706 million EBITA in 2013 while the non-core group was at just £81million, the online accommodation business recording Total Transaction Value of £2,077 million and specialist and activity £1,433 million.