TUI Travel, the world's biggest tour operator, reported a better-than-expected full-year profit, boosted by strong online sales and demand for exclusive resorts and offering a stark contrast to struggling rival Thomas Cook. The group, which takes 30 million people on holiday each year, said on Monday operating profit for the year to September rose 18 percent to a record 471 million pounds ($736 million).
The average forecast had stood at 461 million, according to a Thomson Reuters I/B/E/S poll. "We have delivered another year of profit growth, against a backdrop of unrest in key North African destinations and weak consumer sentiment in some source markets," Chief Executive Peter Long said. "Even in the current challenging market conditions, we continue to operate from a position of strength."
TUI Travel, which operates Thomson and First Choice, said it had managed to grow sales and profit in Britain, while its main competitor foundered, because of its greater online presence and the high proportion of "differentiated product" that cannot be bought from other travel firms.
The group has focused on brands such as Holiday Village and Thomson Couples which offer holidays to exclusive resorts like Sensatori. It has also benefited from appealing to a broader demographic of customer than Thomas Cook - whose core customer base of young families has suffered most through the downturn. "The results reflect the strategy of an astute management team operating in exceptionally challenging conditions, a strategy sharply at odds with the inept approach of their opposite numbers at Thomas Cook," said Richard Curr, head of dealing at Prime Markets. Thomas Cook has endured a torrid 2011, issuing a string of profit warnings, and faces an uncertain future as it battles to regain the confidence of holidaymakers and investors after securing a rescue package from its lenders.
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