Online bedbanks deliver strong margins for TUI Travel

TUI Travel‘s online destination services (ODS) unit – which includes its B2B and B2C accommodation-only web sites – has recorded the group’s highest operating margin in the three months to end-June.

ODS made an underlying operating profit of £17.4 million (Q3 07: £16.2 million) from revenues of £143.8 million (Q3 07: £16.2 million), giving it a margin of 12.1% (Q3 07: 11.8%).

The unit’s profit was only better by the central Europe mainstream business which made £37.5 million with margins of 3.1%. TUI Travel’s group-wide operating profit for the quarter was £65.4 million.

The bedbanks within ODS are consumer sites, and, with and operating as B2B wholesalers.

The revenue and profit figures also include other offline in-resort, MICE and destination services. While the breakdown between on and off line is not revealed, TUI said that the unit’s profitability was ‘mainly due to a strong performance in the online businesses, with the offline business performing in line with prior year.’

However, the current trading line does offer an insight into ODS’s online performance. Total transaction value from online for the summer season up to 5 August was 23% ahead of where it was at the same stage last summer, with 21% more customers. Average selling price was 2% up.

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