TUI Travel, a British-based tour operator, has recently made it clear that it’s pulling a number of holidays from the Russian market. In fact, CEO Peter Long said that the company is cutting at least 30 percent of the holidays that it offers in the country.
According to TUI Travel, the reason for cutting some of the holidays in Russia has been due to difficult trading in the country and the Ukraine. High tension between these two areas has seen profits drop by nearly £27 million for TUI Travel in just the fourth quarter.
When speaking about the cuts, Long said that the group is having to take a very cautious view for the upcoming winter in Russia. The country is not a popular place to travel during the winter anyway. However, with the low demand that was seen over the past few months, TUI Travel has to consider that this is going to continue throughout the rest of the year and into next. Hopefully, it will see demand for this area increase by next summer.
Of course, it hasn’t been all bad news for TUI Travel. While sales are down in Russia, they are booming in Germany. The company said that it recently saw an increase in trading in the country. This increase doubled for package holidays, which were up nearly 22 percent this summer compared to last. Total, overall bookings in Germany increased 9 percent.
Speaking about this increase, Long said that demand for Germany has increased this year compared to last. Many Germans travelled during August for school holidays and football. Hopefully this strong increase in demand will continue.
Not all travel companies are having such positive results in Germany. Thomas Cook, a rival tour operator, has reported a growing weakness in the German market. The company says that the lack of holiday bookings is the result of weak consumer confidence. However, if that was the case, it doesn’t explain why TUI Travel is seeing such a positive increase in the German market.
This summer, TUI Travel said that the sales it had in Germany from British holidaymakers will help deliver high profits to the company. The average selling price for package holidays this summer was only up 1 percent on last year.
So what has been the secret to TUI Travel’s success? Most of it has to do with unique holidays that are tailored to customers’ needs. TUI Travel said that demand for these holidays made up a huge 70 percent of its mainstream bookings. Sales for summer holiday bookings online rose 37 percent as well.