12 December 2022, etc.venues Monument, London
Business Travel Show Europe, presented by The BTN
21 November, London Hilton Metropole
In one of the major deals of the year so far, TUI”s tourism division and First Choice have merged to create one of the world”s largest travel groups, although the UK looks set to lose jobs as a result.
To be known as TUI Travel and based in the UK, the merger will have an impact on UK jobs, although precise numbers remain unclear. TUI currently owns Thomson Holidays with a significant high street presence.
Germany-based TUI will have a majority 51% share, with existing First Choice shareholders controlling the remaining 49%, although certain hotel assets are to stay with First Choice, whose chief executive is to become CEO designate of the new company.
The deal remains subject to anti-trust and shareholder approval, but, coming on top of the recent MyTravel and Thomas Cook merger, appears to be driven by the consumer and business trend of self-booking, with travel agents” specialist knowledge becoming less popular.
”We are creating one of the most profitable and efficient tourism groups in the world,” said TUI chief executive Dr. Michael Frenzel, who will become Chairman of TUI Travel. ”At just the right time two strong partners are joining forces: TUI Travel PLC is clearly aiming at growth and simultaneously will make good use of the opportunities presented by the ongoing consolidation in the European travel market.”
The merger creates an enormous company with revenue of around ”12.1bn ($23.5bn), catering for a staggering 27m passengers per year, while significant savings of around ”100m within three years are expected through what the new company refers to as ”synergy.”
What seems to be clear however, is that the UK will bear the brunt of any job losses as a joint administration, common joint fleet and common IT infrastructure, start to make an impact, leaving employment in Germany not directly affected.
”TUI is clearly the market leader in traditional beach package holidays and during the past few years, First Choice has successfully expanded in the modular travel segment and in certain niche markets, said CEO designate, TUI Travel, Peter Long. ”Both partners will benefit from the know-how of the other.”
”We have used the past year to do our homework and many structural and operational measures have been started - now we are fit for the future,” said Frenzel.
”By taking this step we are creating room to take positive action and are driving forwards the consolidation of the European tourism business.”