TUI chief admits to long haul slowdown

The boss of Europe’s largest travel company has admitted demand for long-haul travel is slowing as customers respond to higher air fares. Speaking at the region’s first ITB, Peter Long, chief executive from TUI Travel plc, said that demand for longer flights would recover in the medium term. Long reassured the audience that “fundamentally, I believe…

The boss of Europe’s largest travel company has admitted demand for long-haul travel is slowing as customers respond to higher air fares.

Speaking at the region’s first ITB, Peter Long, chief executive from TUI Travel plc, said that demand for longer flights would recover in the medium term.

Long reassured the audience that “fundamentally, I believe that customers do not want to forego their annual holidays,” although he added that “they may cut out that [extra] short break.”

Addressing TUI’s presence in Asia, he said that its existing brands – such as HotelBeds, AsiaRooms, Turismo Asia and TUI China – will be the platform on which its plan to expand in Asia will be based.

Long is convinced that Asia’s growth will be driven by intra-regional travel, without European-style mass-market products. He also expects online sales to be a significant slice of a significant market:

‘We expect to see another 600 to 700 million people traveling from and within Asia over the next five years – and mainly to other Asian destinations,” he said.

Elsewhere, TUI Travel has added another bolt-on acquisition to its Student Travel unit, buying Michigan-based Travel Adventures for an undisclosed sum.

TUI is already the largest student travel specialist in North America. A recent UNWTO study said that, globally, student and youth travel is a $165bn-a-year sector.

TUI Travel’s new business “specializes in educational travel experiences to support science, social studies and Spanish curricula, as well as performance opportunities for drama, choral, band and orchestra groups.” Its general manager, John Krish, recently took over as president of the Student & Youth Travel Association.

Back at ITB Asia, representatives from major OTAs gave their perspective on the region. Adrian Currie, formerly FCO at booking.com and now CEO of Priceline’s APAC bedbank agoda.com said: “Asia-Pacific has become a huge part of the story for our group as a whole. Bookings are growing fast, and they’re a significant piece of the pie now.”

Jens Uwe Parkitny, managing director, distribution of Expedia Asia Pacific, said it had decided to “put more supply teams and market managers in the market to provide consultancy services to hotels”, while Scott Blume, CEO of Zuji, part of Travelocity, hinted that dynamic packaging capability was the key to succeeding in the region.

“Travel agencies can build higher profits into such sales by securing wholesale prices from hoteliers and airlines and marking up these vacation packages,” Blume said.