Thomson and First Choice owner reports record profit

Russell Parsons

TUI Travel, owner of the Thomson and First Choice brands, has reported a "record" profit for its last financial year, in stark contrast to the recent difficulties reported by rival Thomas Cook.

Operating profit increased 18% to £471m in the year to 30 September, driven by sales of "differentiated and exclusive" resorts and holiday packages. Revenue rose 9% to £14.7bn.

Peter Long, chief executive of TUI Travel, says he is pleased with the "robust performance" achieved despite "weak consumer sentiment" in key markets such as the UK.

He adds: "These achievements reflect the strength of our strategy to increase differentiated and exclusive product sales, increase controlled distribution with a focus on online to enhance our customer access and reduce distribution costs...."

TUI Travel will be hoping for a further boost following rival Thomas Cook financial problems, which saw the Going Places owner receive emergency refinancing from banks last week after reporting falling sales.

It has already looked to cash in with an opportunistic campaign for Thomson claiming the brand was a "safe pair of hands" when other holiday companies were experiencing financial problems.

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YouGov Insight:

Holidaying 

·      Two thirds of consumers have taken short breaks in the UK over the past year.

·      However, the recession and its aftermath have taken a heavy toll on short haul, short breaks. Just over one fifth of adults have taken a European short break over the past year.

·      Those who have continued to take European short breaks are most likely to be young single men under 25: essentially, confident travelers who have been less affected by the recession than older consumers.

·      1 in 4 young men between the ages of 16 and 24 have taken short breaks in Europe in the last year. This is well above the average of 15% across all demographics.

·      1 in 4 YouGov respondents said that having friends or relative in the area had a bearing on the choice of destination for their last short break.

·      Half of ABC1s said that they just don’t like lying on the beach, while only 37% of C2DEs feel the same.

YouGov Holiday Travel Report

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