According to the CEO of Tui Travel, Mr. Peter Long, the British tour operator will reduce the number of holidays it offers Russian customers by up to 30%. This was agreed after the depreciation of the ruble which made it difficult for the company to raise prices.
Mr. Long said that the company is taking precautions in the Russian markets because of the winter. The company is reducing its deals and will re-evaluate them for next summer based on winter performance. The rest of the firm’s dealings in other markets are well, but are more of a make-up for the problems they are experiencing in Eastern Europe.
The company targets to have a full year profit growth of a minimum 9 percent. This is after they hiked their selling prices to above average during the summer. The German and UK divisions, for example, are set to record high profits. The tour operator experienced a 22 percent increase in holiday bookings in Germany after the country emerged victor in the World Cup tournament. In the UK, its winter 2014/15 bookings were up by 2 percent while its summer bookings rose by 11 percent.
Numis analysts believe that Tui Travel’s new strategy will be accepted by the market and is a justification of Peter Long’s outstanding leadership. The company is also on the verge of merging with TUI AG to create the best and biggest leisure and tourism group in the world. Investors have been yearning for such a merge since 2007. Mr. Long said the feedback from shareholders was encouraging and will continue engaging them before the final decision is made.