All Inclusive Holidays

Jane AshtonGroup Director Sustainable DevelopmentWTM 8th Nov 2011

TUI Travel PLC

— The world’s leading international leisure travel company— 30 million customers from 27 source markets— Operating in over 180 countries— 140+ aircraft and 3,000+ retail shops in Europe— 49,000 colleagues

MainstreamSector

Emerging MarketsSector

Accommodation &Destinations

Sector

Specialist & ActivitySector

Classic TO business / market leading

Portfolio of specialist &activity companies

The world of TUIDestination services& online accommodation

Our structure

April 2011 – TUI UK Brand Repositioning

A holiday where customers don’t have to worry about how much

they’re spending.

Flagship hotels: Holiday Villages

A holiday where everything’s just right.

Flagship hotels: Sensatori & Couples

Why did FC brand itself “The Home of AlI Inclusive”?

• Brand differentiation

• Mintel 2010: 32% agree “All Inclusives…are my preferred kind of package”All Inclusives 30%+ growth 2004-2009

• First Choice was already 2/3 All Inclusive

• For First Choice’s family market AI offers peace of mind

• Non-AI hotels moved to Thomson and some Thomson AI hotels to First Choice

Press reaction

AITO:‘The First Choice announcement is

good for the budget-conscious tourist, disinterested and

incurious about their destination, who

cares little or nothing for their host

country.”

‘First Choice all inclusives:

Is it profit over people?’

Press reaction 95% favourable, but some trade sceptics:

Press Reaction

“First Choice has

a progressive reputation

in responsible

tourism.

The challenge it faces is in

implementing this

across its business.”

Common claims about All Inclusive

First Choice’s Experience

Poor customer satisfaction FC AI customer satisfaction scores measure equal or higher than non-AI, apart from location

Customer discretionary spend is lower

FC AI customers take 14% less currency on holiday than non-AI

Customers don’t leave hotel FC AI customers take 20% more excursions than non-AI customers

AI is a passing fad AI customers as ‘likely to return’ as non-AIAI hotel occupancy is higher and sells earlier

AI has poor employment record

Research done by Travel Foundation, GIZ and Overseas Development Institute finds differently

Leakage ODI research at Holiday Village Turkey last year showed 90+% of hotel expenditure on Turkish goods

Destination impact Wide scale switch to AI can impact surrounding tourism businesses. Would customers be travelling at all without AI?

Issues – far from black and white

TUI UK’s Holidays Forever Commitments

Research currently underway

• With Overseas Development Institute – in-depth socio-economic impact studies at 3 Holiday Villages to agree indicators for monitoring, improving and reporting economic impact of our flagship differentiated hotels. • With Travel Foundation to measure and improve local purchasing policies and customer discretionary spend at All Inclusives – 3 locations, starting with Tenerife

• With Travel Foundation to build capacity with local farmers to supply hotels in the Dalaman area with fresh produce

•AI is here to stay, and critical for destination livelihoods against background of economic uncertainty

•Like all forms of tourism, AI can be made more sustainable

•Our focus is for First Choice All Inclusives to be the best, for experience and sustainability

•Focus on impact , research and action rather than polarised debate

All Inclusive Holidays

Thank you!