TUI staff face extended holiday

TUI's integration is apparently progressing well – but hundreds of staff are facing the chop as a result.

Last Updated: 31 Aug 2010

The tour operator, formed by the £3bn merger of German company Thompson and UK group First Choice last year, has just completed a strategic review. The result is that it plans to close down 100 of its UK high street travel agencies in a bid to save up to £150m a year, meaning that hundreds of jobs are potentially at risk. Back office functions are also under threat as part of the dreaded ‘streamlining’ process – although the company has said it will try to redeploy the affected staff elsewhere in the group.

CEO Peter Long hailed the success of the merger today: ‘The integration of the two businesses is progressing very well and accordingly, we have upgraded our synergy target by 50 per cent to an annualised £150 million.’ Which is a remarkably cheerful way of announcing wide-ranging job cuts.

In some ways there’s a degree of inevitability about all this. A few years ago, everyone bought their holidays in their local travel agent. These days, the internet rules supreme, and many people wouldn’t dream of trekking down to their local TUI to browse a few dog-eared catalogues when they can see everything online instead.

And TUI itself is operating in an increasingly tough marketplace. Now that the internet has made it so easy to book cheap flights and hotels around the world, the demand for traditional mass-market tour operators is waning. The travel company said today that operators are selling about 10% fewer holidays this year, in a bid to prop up prices. So it needs to be lean and mean to survive.

Still, the business seems to be doing reasonably well. It’s planning to spend up to £150m a year buying smaller operators. And bookings for next summer are 8% up on this time last year – which just goes to show that credit crunch or no credit crunch, nobody’s going to keep the Brits from their two weeks in the sun.

Although we can't imagine that its poor retail staff are feeling particularly sunny this morning...

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