Tui, the world’s largest tour operator, plans to sell off its specialist tour business as part of its efforts to slim down and focus its firepower on package holidays.
Last month, the company behind brands such as Thomson and First Choice, announced a €1.2bn deal to sell its Hotelbeds Group, a bedbank that offers rooms to travel agencies and airlines. On Wednesday, Tui said it would also dispose of Specialist Group, its portfolio of more than 50 specialist travel brands, and expected to begin marketing the sale this year.
Friedrich Joussen, Tui chief executive, said “we have decided to sell these businesses because they are not our brands, they are not our [intellectual property], they are not filling our planes or hotels, so the synergy is not there. They are great companies but there may be a better owner.”
Selling off Specialist Group, which had revenues of €850m in the first half of this year, down 4 per cent year on year, fits with Tui’s broader strategy to dispose of non-core assets and focus on package holidays.
However, Tui said two of the tour operators in the Specialist Group portfolio — Crystal Ski and Thomson Lakes & Mountains — would be transferred back into the main company and not form part of the sale.
Last year it sold its UK hotel booking website LateRooms and closed the underperforming AsiaRooms site.
On Wednesday, Tui also announced an agreement to acquire Transat’s French tour operating company for €55m, in an effort to boost its French business.
Announcing the decision alongside half-year results, the company said that trading for the summer season was in line with expectations. Lower demand for trips to north Africa and Turkey, following a spate of terrorist attacks in the region, had been offset by travellers choosing holidays to destinations such as the Canary Islands, preferring long-haul trips and cruises.
Tui reported revenue of €6.79bn in the six months to March 31, ahead of analysts’ estimates of €6.61bn and up 2.7 per cent year on year. But it also reported a loss before interest, tax, debt and amortisation of €236.9m, compared to a loss of €283.1m a year earlier.
Shares in the group fell 3 per cent to £10.36 on Wednesday morning.
Tui said it remained on course to deliver its target of 10 per cent profit growth for the full year, thanks to continued buoyant demand from British holidaymakers and more profitable long-haul bookings. Excluding trips to Turkey, bookings had increased 8 per cent in the first half of the year.
In March, British rival Thomas Cook said market conditions were “challenging” following the terror attacks, leading anxious holidaymakers to postpone booking trips. The company said it had sold 2 per cent fewer summer holidays than at the same point a year ago.
By contrast, Tui said 59 per cent of its summer programme for this year had been sold, which was broadly in line with last year. Bookings from the UK were up 7 per cent, driven by interest in destinations such as Spain, Greece and Cyprus, as well as more far flung locales such as Mexico, Dominican Republic and Jamaica.
But revenues and bookings were down across the Nordic region, Benelux countries and Germany, due to subdued demand for trips to Turkey and a further slowdown following the terrorist attack on Brussels airport in March.
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