TUI Believes Asia and Russia Present Huge Potential for Future Growth

Leading European leisure travel company, TUI spoke of the huge potential for future growth in the Asian and Russian markets at ITB Asia in Singapore.

 

Mr Peter Long, CEO of TUI Travel PLC, said, ?We expect to see another 600 to 700 million people travelling from and within Asia over the next five years ? and mainly to other Asian destinations.?

 

Although TUI Travel?s primary operations are in markets such as Europe and Canada which are in a mature state of development, the company sees its future growth coming from emerging markets such as Asia and Russia.

 

?We already have a strong presence in the Asia region,? said Mr Long, ?with brands such as Pacific World, HotelBeds, AsiaRooms, Turismo Asia, TUI China, Aitken Spence, and Le Passage to India.

 

?Our planned expansion will use these established platforms,? he said.

However, TUI also expects to lead the market in online sales which has been a segment in which the group has continued to dominate over the last few years, despite intense competition from online intermediaries.

 

According to Mr Long, TUI has an enviable market position and product range which includes some 200 brands.

 

TUI also has the advantage of strong vertical integration with tour operations, retail distribution (3,500 travel agencies), accommodation, and seven airlines, with a total fleet of 160 aircraft.
Mr Long said that he expects Asian markets to show different demand patterns from its European sources ? for example, the Asian market will not show the same level of interest in mass-marketed products.

 

The reason behind the group?s decision to invest heavily in developing infrastructure in the region lies with TUI?s belief that most of the demand will be for intraregional destinations.
Mr Long admitted that the operating environment could be tough in the short term. ?The situation is clearly challenging,? he said. ?But I have had equally challenging times in the past.?
What remains unknown, noted Mr Long, is how much consumer demand will weaken. He said this uncertainty requires a more flexible approach together with careful planning.

?Fundamentally, I believe that customers do not want to forego their annual holidays,? said the TUI boss. ?Although they may cut out that [extra] short break.?

As far as European markets are concerned, Mr Long said that high airfares are currently having an impact on demand for longhaul travel, ?But I also think that, in the medium term, Europeans will want to travel to longhaul destinations.?