TUI Germany: Cautious optimism for the summer, +10% demand for Greece

TUI Germany is unsure whether late sales will take off this summer and is expanding hotel capacity massively for the forthcoming winter season.

The German market leader remained vague about prospects for late bookings for this summer at the presentation of its winter 2016/17 programme on Mauritius last weekend. Asked about his views, Germany chief Sebastian Ebel shrugged: “I don’t know. Ask me again in three months how it went, then I can make some comments.”

TUI did not disclose any overall summer 2016 sales figures apart from noting that 70% of capacity has been sold so far. Asked about Turkey, where TUI had a 40% drop in bookings as of February, Ebel commented only that: “We’ve recovered a bit.” But he was “cautiously optimistic” that TUI could compensate for the decline in bookings for Turkey, Egypt and Tunisia with growth in other destinations. Sales revenues are up strongly for Spain (20%), Portugal (19%), Croatia (26%), Bulgaria (24%) and Italy (21%) while demand for Greece is up by nearly 10%.

For winter 2016/17, TUI is tripling its hotel portfolio to 75,000 properties, including 15,000 in long-haul destinations. Capacity on the Canaries, where every third TUI customer will holiday next winter, has been increased by 40% to 700 properties. “Due to the weaker demand for Egypt and Tunisia we expect further growth here,” said tourism director Oliver Dörschuck.

There are also more three-star hotels than ever before. “We’re already the clear number one in the premium and luxury market. Now we’re aiming for market leadership with our core TUI brand in the middle market segment as well,” declared Ebel. In addition, TUI will open ten new own brand hotels this winter, including three new Sensimar hotels.

Prices will be generally stable next winter, with slightly higher prices for some popular destinations while Turkey, Egypt and Tunisia will be 3% cheaper on average.

Early booking discounts

TUI’s budget brand 1-2-Fly is offering numerous early booking discounts and special children’s prices in a bid to secure early bookings for the coming winter, while it has also expanded capacity for the Canaries and long-haul destinations.

“Exotic destinations are in higher demand than ever for price-conscious customers,” said the brand’s chief Stefan Baumert. Last year the budget brand already generated “high double-digit bookings growth” for long-haul destinations. The portfolio has been expanded by 300 more hotels and additional tours for the coming winter season. On the Canaries, where about 20% of customers will holiday this summer, 1-2-Fly has added 111 more hotels, giving it more than 500 in total.

Meanwhile, TUI Germany’s premium brand Airtours is offering customers a new ‘flexible guarantee’ for winter 2016/17, with free cancellation or re-booking options right up to just 24 hours before departure. However, customers have to pay extra for this option, ranging from €15 per person for city trips to €39 for hotel bookings up to €5,000 and €99 for luxury holidays costing up to €10,000. The option does not cover flight-only bookings or cruises. Brand chief Steffen Boehnke said this kind of arrangements would be expanded further in the future.

With a 40% surge in cruise bookings this year, Airtours has expanded capacity for the coming winter to a total of 32 ships and more than 800 routes. On land, Peru and more Indian Ocean hotels have been added to the long-haul programme.

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