Tui Travel’s focus on unique products is driving its strong results and is “almost impossible to copy”, says UK managing director Dave Burling.
The Tui group announced strong third-quarter results today, with average selling prices up on a year ago and a rise in underlying operating profit of 21%.
Burling said: “We believe we have a much stronger product offering than our competitors and the strategy is almost impossible to copy.”
He told Travel Weekly: “To do differentiated product properly you have to create real product concepts. It’s not just a case of attaching a name to a hotel and making a few changes.
“It requires expertise, really strong hotel partners and scale. Those things are built up over years and are really hard to copy.”
Tui has developed a series of unique property types – First Choice Holiday Villages and SplashWorld and Thomson’s Sensatori – since the first Holiday Village opened 10 years ago.
Burling said: “Tui Uk is a long-term investor in these unique concepts, which are driving sustainable growth and [are the reason] we are out-performing the UK market.”
He said: “I liken it to an imitation watch. You might have a watch that looks like the real thing, but it’s not the same.”
Burling highlighted a 2% increase in mainstream average selling prices (ASP) year on year in the UK this summer, saying: “The ASPs are really positive.”
But he said: “Some of our competitors are facing real pressure.”
Rival Thomas Cook reported a 4% decline in UK average sales prices in its third-quarter results last week.
Burling said: “We are looking at increased customer satisfaction, which results in increased customer recommendations and increased repeat bookings and, ultimately, that means increased average selling prices.
“It means people are prepared to pay for the product.”
He reported: “At our Sensatoris, 98% of customers this year have rated the properties as ‘good’ or ‘excellent’ – 80% say excellent, three percentage points up on last year. 95% of Sensatori customers say they will be booking again – one percentage point up on last year.”
Burling said: “We can see there is more capacity in the market and the increased capacity will be making it difficult for people operating in the commodity market.
“But because we have these differentiated products we are less exposed to dips in the market.
“We have customers who are higher value, seek out these products and book earlier. Our strategy is operating at a higher level.”