TUI Review Reveals Savings Target Increased to £150 million

TUI Travel PLC today announced the results of its 100 day review, providing an update on its strategy following the merger between First Choice Holidays PLC and the tourism division of TUI AG in September 2007, (Thomson Holidays). Following the review, TUI has set a series of new objectives as well as announcing that it is upgrading its synergy target from £100 million to £150 million per annum, to be achieved by the year ending 30th September 2010. TUI said the additional £50 million synergy benefit will be realised through integration opportunities in the UK, continental Europe and in a number of central functions.

TUI Travel Chief executive officer Peter Long said the integration of TUI and First Choice is progressing very well, leading the group to upgrade its targets: "The 100 day review has confirmed my initial view that TUI Travel will deliver superior returns for our shareholders. The integration of the two businesses is progressing very well and accordingly...We have now developed a clear vision and strategy for growth that goes beyond the delivery of the cost synergies...”

"...In our portfolio of specialist businesses we are aiming to continue to deliver a mix of strong underlying organic growth and value enhancing acquisitions." 

Peter Long added that TUI will continue to leverage its portfolio of market leading brands. In the four months to 31st January 2008, TUI Travel has completed four acquisitions within high growth niche segments of the travel market for an overall sum of £22.4 million. Future targets of growth remain as existing travel companies, particularly within the Asia Pacific region, online activity and North American student travel segments.

TUI have stated that current trading is encouraging, with consumer demand for holidays strong with the results of their recent survey suggesting 85% of customers are anticipating spending at least the same amount on holidays as last year, whilst 90% said that holidays would not be the primary area where they would cut back spending. Following the 100-day review, TUI has set a series of new objectives which include establishing a common vision for the organisation, leveraging their portfolio of brands to drive customer loyalty and retention through direct routes to market and investing in sustainable organic and acquisition growth opportunities.