Market has turned corner, says TUI

TRAVEL giant TUI has claimed a market recovery across Europe, with group-wide turnover up more than 3% year on year for the current winter and coming summer.

Speaking at trade fair ITB in Berlin TUI group chairman Michael Frenzel said: “Things are finally on the up after a difficult period and a shrinkage in the market.”

TUI will reveal its group financial results for the past year at the end of this month, but Frenzel was happy to claim a turnaround.

“Group turnover is up 3.3% for winter 2003/04 and this summer, year on year,” he said. “The winter business fully met our expectations, with an increase in turnover of 6% and a 6.4% increase in customers.

“Our summer business is also gaining strength after a weak start in November.”

Frenzel said group summer bookings were about 1% up on the same time last year, and the increase in customer numbers was only slightly lower following strong growth in bookings in recent weeks. He hailed the similar growth rates in turnover and customers as “clear confirmation of our conservative price and capacity policy”.

However, allowing for annual inflation of about 2%, the figures for winter suggest some relative price reductions.

But Frenzel said: “We decided against selling off products cheaply merely for a short-term boost in market share. Our portfolio does not focus on customer volumes, but on prices.”

Most importantly for TUI, its biggest market, Germany, appears on the way back.

“We expect growth in the German market for this summer to be about 5%,” said Frenzel.

However, the TUI chief added a note of caution.

“It is still too early in the day,” he said. “We have difficult months ahead – including two major sporting events, and experience has shown such events do not have a positive effect on bookings.

“I am not euphoric, but I am satisfied. The upturn in the travel sector has begun.”