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A rise in hotel and cruise bookings has helped European travel group Tui sail through another year with an increase of than 10% growth in profits. Year it said next, profits would grow an identical amount as customers bought more excursions and holiday activities also. Tui has seen double-digit growth going back four years.
Last, smaller UK rival Thomas Cook reported a lack of £163m, blaming warmer summer weather for lower amounts of bookings.
“Our very own holiday experiences content makes up about a lot more than 70% of our earnings: hotels, cruises, destination and excursions activities. This permits us to differentiate ourselves from your competition clearly,” said Fritz Joussen, Tui’s leader.
Tui Group posted a 10.9% rise in annual earnings, just before analysts’ forecasts. The share price rose 5.5% following news.
Tui said the “challenging market”, including uncertainty from Brexit and tough competition between airlines, had squeezed consumer spending. Earnings were nearly 15% lower for the group’s tour operator and airline business.
But there is strong growth popular for cruises, holiday and hotels “experiences”, which together take into account 70% of Tui’s earnings. The firm said customers were paying more for extra activities while at their holiday destination, such as for example jungle trails, city tours and cultural experiences.
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The spokesman was profiting from more targeted marketing of in-holiday extras, such as for example room upgrades and tailored excursions.
While during the past, any occasion rep may have offered exactly the same selection of activities to everyone in the hotel lobby on the initial day of any occasion, these were now offering more targeted suggestions to customers through the period between travelling and booking.
He said the recent acquisition of Italian technology firm Musement was allowing Tui to utilize AI to advertise bespoke excursions, for instance a French-language tour of the Coliseum for a particular date booked months ahead.