European Leisure Travel Industry - Europe - September 2009

Table of Contents

• Introduction
• Key findings
• Abbreviations
• Data Sources
• European Overview
• Population structure
• Ageing of the population
• 80+ segment to grow rapidly
  • Figure 1: Percentage distribution of the population in selected age groups, by region/country, 2009 and 2050
• More outbound travel from Northern & Central Europe
• 25-44 age segment is the prime outbound travel market
• Drop in outbound travel after 64
  • Figure 2: Breakdown of trips (holidays of four nights or more), by country, age segment and type of destination, 2006
  • Figure 3: Breakdown of trips (holidays of four nights or more), by country, age segment and type of destination, 2006 (continued)
• Economic growth
• IMF sees light at the end of the tunnel
• But unemployment will continue to rise
  • Figure 4: GDP growth, consumer prices, unemployment and current accounts balances, 2007-10
• Exchange rate outlook
  • Figure 5: Exchange rates, actual and forecast, (units per US$), 2008-10
• Impact of currency moves on European leisure travel
• Travel and tourism expenditure
  • Figure 6: Trend in European* nominal expenditure on travel and tourism and incoming receipts, 2008-13
• Long-term outlook
  • Figure 7: Travel and tourism expenditure in europe*, 2009-19
• Internet penetration and user growth
  • Figure 8: Internet users and penetration, by European country, June 2009
• Major Industry Players and the Current Market
• Mergers, acquisitions, restructuring, bankruptcies -- trend towards consolidation
• TUI Travel and Thomas Cook Group dominate a shrinking market
• TUI sells Hapag-Lloyd for €4.45 billion
• TUI retains a one-third stake
• Fredriksen versus Mordashov
• Conflict of interest accusations
• Fredriksen' s motion did not succeed
• TUI AG might take back some TUI Travel operations to Germany
• Bankruptcy is the order of the day
• XL left tens of thousands stranded
• Skyrocketing fuel costs
• Warning signs of a collapse
• Trading under a wide variety of names
• Impact on the travelling public
• Bankruptcy usually not covered
• Impact on the industry
• A UK market share of 7-10%
• Thomas Cook parent, Arcandor AG, in dire financial straits
• Thomas Cook excluded from bankruptcy proceedings
• REWE could be interested in Cook
• Obstacles to be overcome
• Thomas Cook sale increasingly likely
• Cook raises some cash with the sale of its stake in L' TUR
• Ranking of the Major Players
• Stagnation since 2002
• The two top tour operators worldwide are UK plcs
  • Figure 9: Top 10 European leisure travel groups, fiscal years 2007 and 2008
• TUI Travel/TUI AG
• Mainstream
• Central Europe
• Northern Europe
• Western Europe
• Margins improved in fiscal year 2008
  • Figure 10: Mainstream sector results, FY 2007/08
• Specialist and emerging markets
• North America
• Europe
• Emerging markets
• Falling revenues and lower margins
  • Figure 11: Specialist and emerging markets sector results, FY 2007/08
• Activity sector
• Adventure
• Marine
• Ski
• Student
• TUI has acquired language course specialists
• Sport
• Activity -- a growth sector
  • Figure 12: Activity sector results, FY 2007/08
• Accommodation & Destinations
• B2B -- Portfolio Incoming
• B2B -- Hotelbeds
• B2C
• A high margin growing business
  • Figure 13: Accommodation & Destinations results, FY 2007/08
• TUI Hotels & Resorts
  • Figure 14: TUI Hotels & Resorts portfolio, 31 December 2008
• RIU
• RiuLand Children' s entertainment
• 1,000 rooms to open in Cuba
• Grupotel
• Robinson
• Magic Life
• Iberotel
• Grecotel
• Dorfhotels
• Other TUI hotel brands
• Underlying operating profit up 53% for TUI Travel
  • Figure 15: Underlying/reported comparative results for TUI Travel, years ended 30 September 2007/08
  • Figure 16: Reconciliation of underlying profit before tax to reported profit/(loss) before tax, 2007/08
• Turnover up 9% for TUI Hotels & Resorts
• Cruise turnover up 9%
  • Figure 17: Results for TUI AG' s hotels and cruise businesses, fiscal years ended 31 October, 2007/08
• Prospects for the current financial year
• Winter 2008/09 went according to plan
  • Figure 18: TUI Travel trading update, winter season 2008/09, 30 April 2009
• Summer not looking good, however
  • Figure 19: Booking trends for summer 2009, y-o-y change % as of 2 August 2009
• Down across the boards
  • Figure 20: Current trading summer 2009, as of 10 May 2009
• A weak Q1/2009 for TUI AG
  • Figure 21: Consolidated results for TUI' s tourism businesses, FY Q1/2008/09
• Thomas Cook Group
• Details by segment
  • Figure 22: Summary of Thomas Cook business units, based on results for FY 2007/08
• Interim results flattered by favourable currency moves
• Thomas Cook expands in the luxury sector
• Cook is expanding outside Europe
• Acquisitions in India & Middle East
• Terms of the deals
• Strategic alignment
• TCIL
• Egypt
• The TriWest acquisition
• Thomas Cook' s hotel links
• Thomas Cook has purchased MedHotels from lastminute.com
• Holiday hotels
• Cook has also purchased hotels4U
• Med Hotels and hotels4u to remain separate brands
• Sentido launches with 17 hotels
• Mountain regions could also be included
• Thomas Cook in exclusive deal for Turkish hotels
• REWE
• Two types of tour operators
• ITS -- the volume brand
• Jahn Reisen -- the brand for individual specialities
• Tjaereborg -- the dynamically priced brand
• INDI
• Dertour -- the modular holiday brand
• Dertour enters the health tourism market
• 2009 turnover up 18% in Romania
• Meier' s Weltreisen -- the long-haul specialist
• ADAC Reisen -- the mobile holiday brand
• REWE Touristik Hotels & Investments
• Calimera Active Hotels
• PrimaSol Hotels
• LTI International Hotels
• Number one for distribution
• Sales downturn for specialist tour operators
• Heavy discounting for early booking
• Kuoni
• Leisure travel
• A new concierge service introduced
• Mainstream segment
• Distribution
• Kuoni' s concierge service
• Destination Management
• Recent acquisitions
• Desert Adventures Tourism
• Kuoni acquired ATM
• Kuoni moves into the Chinese market
• Guangzhou International Travel Services
• 160 travel agencies and a turnover of €133 million
• Kuoni discontinued Shoestring
• 2008 results encouraging
• But cash flow down...
• Results by SBU
• Switzerland
• Scandinavia
• UTE Megapolus
• SBU Europe
• SBU United Kingdom
• Asia & Destination Management
• Outlook
• A new reporting structure
  • Figure 23: Tour-operating booking levels for the Kuoni Group as of 15 March 2009
• Kuoni' s cost reduction programme
• Club Med
• The move upmarket
  • Figure 24: Number of 4-/5-trident customers in the winter season, 2004-09
• Quality not quantity
  • Figure 25: Club Med customer numbers, by region, 2004-08
• Shoring up company finances
• Club Med no longer in the tour operator business
• Capital increase
• Adapting to the global crisis
  • Figure 26: Adapting CAPEX* projects, 2007-10
  • Figure 27: Capacity, by category and region, 2007 and 2008
• Alltours
• Alltours' new tour operator
• Alltours is buying hotels
• No borrowing necessary
• New hotel concept
• Alltours Espana
• Alpitour
• Revenue stagnating
  • Figure 28: Alpitour results, FY 2007-08
  • Figure 29: Results, by business segment, FY 2008
• Alpitour' s tour operator brands
• Alpitour World Hotels & Resorts
• Alpitour divests
• Outlook
• Hotelplan
• EBITDA down sharply in fiscal 2008
  • Figure 30: Hotelplan comparative results, FY 2007/08
  • Figure 31: Turnover, by Hotelplan subsidiary, FY 2008
• Hotelplan Group growth strategy
• M-Travel subdivisions
  • Figure 32: Hotelplan Group strategy, 2007-09
• TClub expanded internationally
• New niche operators
• VACANDO
• Hotelplan also in Russia
• Inntravel
• FTI Touristik
• The specialists
• LAL Language Travel
  • Figure 33: FTI' s language school portfolio, 2008-09
• fly.de
• DriveFTI
• Distribution
• Sonnenklar.TV
• Destinations
• Winners and losers for the summer season 2009
• Outlook for the winter season 2009/10
• All-inclusive trend continues
• Early booking savings -- including bonus nights on arrival
• 13% more hotels in 14 catalogues
• Ventaglio
• Ventaglio' s tour operator brands
• Ventaglio
• Viaggi Columbus
• Ventaglio I Viaggi
• Caleidoscopio reinstated
• Utat Viaggi sold
• Best Tours
• 105Travel -- the new youth brand
• ' Lungomare'
• New developments in fiscal year 2008
• Distribution strategy
• www.ventapoint.com
• Group EBITDA down by 74% in fiscal year 2008
  • Figure 34: Ventaglio Group' s comparative results, FY 2007-08*
• The ' 2009-12 restructuring and turnaround plan'
• Asset sales already anticipated and underway
• Livingston sold
• Best Tours sold
• 15 hotels sold
• Online Travel Groups
  • Figure 35: Global distribution system ownership breakdown, 2009
• Amadeus
• Sabre
• Travelport
• GDSs still an important channel
• Who are the big Internet players worldwide?
• Brand expansion strategy
  • Figure 36: Selected major Internet travel portal providers active in Europe, 2009
• Expedia Europe
• Europe' s bookings and revenue more than 20% of Expedia' s total
  • Figure 37: Segment results for Expedia Europe, 2006-08
• Expedia tussles with Ryanair
• Ryanair later backed out of the deal
• Expedia' s Venere.com acquisition
• Agency basis only
• Venere operates autonomously
• Expedia beefs up EMEA presence
• JoinExpedia.com
• Global lodging agreements
• Orbitz
  • Figure 38: Orbitz share price, July 2007-July 2009
• Priceline
• Travelocity
• hotel.de AG
• HRS (R Ragge GmbH)
• Major European Outbound Markets by Country/Region
• Only four true international players left
  • Figure 39: Geographic coverage of leading European tour operators, 2009
• Austria
  • Figure 40: Personal/incoming travel and tourism expenditure in Austria, 2009-19
• Market characteristics
• Holiday trips of four nights or more
• Travel propensity
  • Figure 41: Holiday travel behaviour of the Austrian population*, 2000-08
  • Figure 42: Top destinations abroad for main holiday trips, 2007
• Transport
• Accommodation
• Seasonality
• Travel market
• TUI Austria
  • Figure 43: TUI Austria performance data, FY 2007-08
• Winter trading update 2008/09
  • Figure 44: TUI Austria --2008/09 winter trading update, at 30 April 2009
• Summer trading update 2009
  • Figure 45: TUI Austria -- summer trading update, at 10 May 2009
• ITS Billa Reisen Austria' s direct marketing operator
• FTI Austria
• Belgium
  • Figure 46: Personal/incoming travel and tourism expenditure in Belgium, 2009-19
• Market characteristics
  • Figure 47: Trend in Belgian holidays, 2000-07
• France remains number one
  • Figure 48: Ranking of holiday destinations, by Belgian arrivals, 2000-07
• Shorter stays at the beach
  • Figure 49: Holidays -- Average length of stay, by destination, 2000-07
• Travel market
• Air packages 61% in summer 2008
• Accommodation only -- a growth segment
• Winter 2008-09 bookings down 5.6%
• Air packages take a hit -- down 10.4%
• Car holidays fared slightly better
• Ski holidays held up well
• The TUI and Thomas Cook duopoly
• TUI profit up
• Winter 2009/10 trading update
  • Figure 50: TUI Belgium -- 2008/09 winter trading update at 30 April 2009
• Summer 2009 trading update
  • Figure 51: TUI Belgium -- summer trading update at 10 May 2009
• Thomas Cook
• Eastern Europe (Czech Republic, Hungary and Poland)
• Czech Republic -- market characteristics
  • Figure 52: Personal/incoming travel and tourism expenditure in Czech Republic, 2009-19
  • Figure 53: Long outbound personal trips of four overnights or more, 2007
• Czech Republic -- travel market
• CK Fischer
• ITS Billa Travel comes to Czech Republic
• Hungary -- market characteristics
  • Figure 54: Personal/incoming travel and tourism expenditure in Hungary, 2009-19
• Hungary -- travel market
• Thomas Cook
• TUI
• Budget carrier competition
• Poland -- market characteristics
  • Figure 55: Personal/incoming travel and tourism expenditure in Poland, 2009-19
• Poland -- travel market
• TUI
  • Figure 56: TUI Poland -- 2008/09 winter trading update at 30 April 2009
  • Figure 57: TUI Poland -- summer 2009 trading update at 10 May 2009
• Thomas Cook
• Orbis Travel
• France
  • Figure 58: Personal/incoming travel and tourism expenditure in France, 2009-19
• Market characteristics
  • Figure 59: Year-on-year trend in personal trips taken, by French residents 15+, 2007-08
• Different trends according to type of accommodation and destination
  • Figure 60: Type of accommodation used for personal trips, by destinations, comparison 2007-08
• Lower discretionary spending while on holiday
• French restaurant VAT reduced
• A sharp drop in trips abroad
  • Figure 61: Trend in trips, by length of stay according to destination, comparison 2007-08
• Foreign destinations
  • Figure 62: Personal travel in overseas France and abroad, by destination, 2007
• Current air travel destination trends for the summer of 2009
  • Figure 63: Top five short-haul destinations for the month of July 2009
  • Figure 64: Top five long-haul destinations for the month of July 2009
• Train travel gaining ground
  • Figure 65: Y-o-y % change in personal trips, by mode of transport, 2007-08
• Less hotel arrivals in the French West Indies, but an increase in Guyana
• A fall in hotel capacity in the DOMs
  • Figure 66: Trend in hotel nights in the DOMs, 2007-08
• Travel market
• But 2009 looks more challenging...
• Flight-only is still up, however....
• 100% more tourists were bailed out by the French APS in 2008
• TUI/Nouvelles Frontiéres
• Winter sales down
  • Figure 67: TUI France -- 2008/09 winter trading update at 30 April 2009
• Sales decline seen accelerating for the summer 2009
  • Figure 68: TUI france -- summer 2009 trading update at 10 May 2009
• Thomas Cook
• Jet tours acquisition
• Marmara
• Club Med
• Fram
• Fram buys Plein Vent
• Germany
  • Figure 69: Personal/incoming travel and tourism expenditure in Germany, 2009-19
• The world' s biggest outbound market
• Market characteristics
  • Figure 70: German holiday travel propensity, 2004-08
• Germans still confident in early 2009
  • Figure 71: Trend in German travel intentions for the travel year 2008/09
• Holiday travel only sacrificed as a last resort
• Trend in holiday destinations
  • Figure 72: Trend in holiday destinations, 1997-2008
• Non-European Mediterranean gains further market share
  • Figure 73: Market share of non-European Mediterranean destinations of all holiday trips, 2002-08
• Ranking of domestic destinations
  • Figure 74: Leading destinations for domestic holidays in Germany, 2008
• Mediterranean and Austria on top
• Only 6% of trips are long haul
• Long-term trends in transport and accommodation
  • Figure 76: Long-term trend in transport and accommodation used on holiday trips, 1998 and 2008
• Travel organisation and booking
  • Figure 77: Organisation of holiday trips*, 2005 and 2008
• Trend in booking channels
  • Figure 78: Trend in booking channels, 2005 and 2008
• 12 million Germans to book summer holidays online
• Outlook for spending on holiday travel in 2009
  • Figure 79: Holiday expenditure planned for 2009
• Holidays are considered as basic need
  • Figure 80: Ranking of consumption priorities, 2006 and 2008
• More optimism, but sales still weak...
• Tentative recovery in June
• Travel market
  • Figure 81: Long-term market trend in client numbers and revenues, 2000-08
• Market share trends
  • Figure 82: Ten leading tour operators in Germany, 2008 (ranked by fiscal 2008 turnover)
• Triumph of the ' Middelstands'
• TUI
  • Figure 83: TUI Germany -- 2008/09 winter trading update at 30 April 2009
• TUI sees downturn for the summer 2009
  • Figure 84: Summer 2009 trading update, 10 May 2009
• Destination trends
• TUI Germany 2008 trading results
• TUI cutting prices and capacity for the winter 2009-10
• Margins to be maintained
• New products for the winter season
• But the plan for a crossholding has been annulled
• De-risking of TUIfly achieved
• Air Berlin & LTU
• Wolters to become ' TUI Ferienhaus'
• TUI' s ' Reiseleicht' modular brand
• Thomas Cook
• Airlines Germany
  • Figure 85: Performance data for Thomas Cook' s German airline, 2008
• Neckermann agencies purchased
• REWE Touristik
• Alltours
• FTI Touristik
• Öger -- Gruppe
  • Figure 86: Öger tours clients and turnover, fiscal years 2005-08
• Tour operators
• Hotels and incoming figures
• Aida Cruises
• Schauinsland
• Phoenix
• GTI Travel
• Ireland
  • Figure 87: Personal/incoming travel and tourism expenditure in Ireland, 2009-19
• Market characteristics
• Spending on foreign holidays down by 28% in Q1/2009
• Destinations
• Travel market
• Budget Travel
• Italy
  • Figure 88: Personal/incoming travel and tourism expenditure in Italy, 2009-19
• Market characteristics
  • Figure 89: Italian outbound holiday trips, 2006-08
  • Figure 90: Italian outbound holiday trips, by destination and length of journey, 2008
• Internet bookings up
  • Figure 91: Booking channel for outbound holiday trips, 2007/08
• Travel market
• Alpitour
• Ventaglio
• The Netherlands
  • Figure 92: Personal/incoming travel and tourism expenditure in the Netherlands, 2009-19
• Market characteristics
  • Figure 93: Long* outbound holiday trips, by destination in 2007
• Over one million ski holidays
• Travel market
• OAD
  • Figure 94: OAD performance figures, 2005-08
• TUI
• 2008 results
  • Figure 95: TUI Netherlands performance data, fiscal year 2007-08
• Sales fell in winter 2008/09
  • Figure 96: TUI Netherlands -- 2008/09 winter trading update at 30 April 2009
• Half-year results -- slightly less negative
• But an accelerating downturn for the summer 2009...
  • Figure 97: TUI Netherlands -- summer 2009 trading update at 10 May 2009
• Thomas Cook
• Other competitors: Vacansoleil, Sudtours & De Jong Intra Vakanties
• Nordic region
  • Figure 98: Market shares, by tour operator in the Nordic region mainstream air charter market, 2008
  • Figure 99: Key performance figures for Thomas cook, TUI and Kuoni in the Nordic market, 2008
• Destinations
  • Figure 100: Thomas Cook market share by Nordic market outbound major destination, 2008
• Thomas Cook
  • Figure 101: Thomas Cook Nordic' s concept hotels brands, 2008
• TUI
• Winter 2008/09 trading
  • Figure 102: TUI Nordic -- 2008/09 winter trading update at 30 April 2009
• Summer 2009 trading update
  • Figure 103: TUI Nordic -- summer 2009 trading update at 10 May 2009
• Kuoni Scandinavia
• Primera Travel Group
  • Figure 104: Primera brands, by country, 2008
• Denmark
  • Figure 105: Personal/incoming travel and tourism expenditure in Denmark, 2009-19
• Market characteristics
• Travel market
  • Figure 106: Market shares by tour operator in Denmark, 2008
• Kuoni has acquired Falk Lauritsen
• Finland
  • Figure 107: Personal/incoming travel and tourism expenditure in Finland, 2009-19
• Market characteristics
• Strong gains in Eastern Mediterranean and Bulgaria
• Travel market
  • Figure 108: Market shares, by tour operator in Finland, 2008
• Norway
  • Figure 109: Personal/incoming travel and tourism expenditure in Norway, 2009-19
• Market characteristics
  • Figure 110: Outbound holiday trips and spending, 2002-08
• Travel market
  • Figure 111: Market shares, by tour operator in Norway, 2008
• Sweden
  • Figure 112: Personal/incoming travel and tourism expenditure in Sweden, 2009-19
• Market characteristics
• Travel market
  • Figure 113: Market shares, by tour operator in Sweden, 2008
• Kuoni has purchased a Swedish golf specialist
• Russia
  • Figure 114: Personal/incoming travel and tourism expenditure in Russia, 2009-19
• Market characteristics
• ' Sun and sand' holidays
• Cyprus and the Maghreb
  • Figure 115: Trend in Russian outbound holiday destinations, 2002-07
• Travel market
  • Figure 116: Russian tour operators, 2006*
• TUI' s CIS market push
• VKO Group
• Voyage Kiev
• Mostravel
• Spain
  • Figure 117: Personal/incoming travel and tourism expenditure in Spain, 2009-19
• Market characteristics
• Travel market
• Iberostar
• Globalia
• 2008 operating results
  • Figure 118: Breakdown of Globalia sales, by type, 2007-08
• Packages stagnating
  • Figure 119: Trend in Globalia package sales, 2004-08
• Switzerland
  • Figure 120: Personal/incoming travel and tourism expenditure in Switzerland, 2009-19
• Market characteristics
• Travel market
• Kuoni on the acquisition trail
• Kuoni buys Eastern Adriatic specialist
• Kuoni acquired Swiss education specialist
• Cotravel
• Hotelplan
• TUI Switzerland
  • Figure 121: TUI Switzerland performance data, fiscal year 2007-08
• Winter was down also...
  • Figure 122: TUI Switzerland -- 2008/09 winter trading update at 30 April 2009
• And summer looks worse...
  • Figure 123: TUI Switzerland -- summer 2009 trading update at 10 May 2009
• ITS Coop Travel
• UK
  • Figure 124: Personal/incoming travel and tourism expenditure in UK, 2009-19
• Market characteristics
  • Figure 125: UK residents' visits abroad, by year, 2004-08
• Outbound travel hits a brick wall
• Overseas expenditure
  • Figure 126: UK residents' visits abroad, three months and 12 months to May 2008 and May 2009
• Travel market
• The UK travel sector hard hit by insolvency
• A silver lining?
  • Figure 127: Latest UK ATOL tour operator failures, 10 July 2009
• Bedbank consolidation has altered the competitive landscape
• TUI
• Customer numbers down 8% in 2008
• Sensatori
• More holiday villages
• Two new brochure concepts from First Choice for 2010
• Winter 2008/09 trading update
  • Figure 128: TUI UK -- charter -- 2008/09 winter trading update at 30 April 2009
• But sales will likely fall in summer 2009
  • Figure 129: TUI UK -- charter -- summer 2009 trading update at 10 May 2009
• Thomas Cook
• All-inclusive and ex-Eurozone in demand
  • Figure 130: Summer 2009 mainstream current trading, 10 May 2009
• Cook has acquired Gold Medal
• Gold Medal management team
• Transaction cleared by the EU
• Trends and Issues in the European Travel Industry
• Distribution
  • Figure 131: Trends in overall online travel market size*, Europe 1998-2009
• US still reserves a lot more online
• UK accounted for 30% of Internet sales
  • Figure 132: Breakdown of online travel reservations in Europe, by country/region, 2006 and 2008
• Spain and Italy lead European online travel growth
• PhoCusWright' s conclusions sometimes at odds with Marcussen' s
• Spain, the fastest-growing market
• Italy faster than average growth
• France -- the second-largest market
• Germany -- 20% of bookings online
• Scandinavia -- almost half of bookings online
• UK -- still growing in double digits
• Direct versus indirect
• Online intermediaries increasing their share
• Hotels a promising market
  • Figure 133: Trend in the proportion of direct versus indirect online travel sales in Europe, 1998-2008
• Hotels up -- packages down
  • Figure 134: Breakdown of online travel reservations in Europe, by type, 2006 and 2008
• LCCs increase capacity to holiday destinations
• Eight of the easyJet routes will operate from the UK
• Ryanair' s 33rd European base
• New routes from the Canaries
• The cruise boom continues
• UK and Germany over half the market
  • Figure 135: Trend in cruise passengers, by European country, 2003-08
• The fast-growing German cruise market
• Sea cruises
• Expectations for 2009
• River cruise operators
• Expectations for 2009
• A warning signal on the horizon?
• Travel agencies the main distribution channel
• Holiday rentals
• Environment and sustainable development
• Levels of acceptance vary
• What Next?
• More travel failures by autumn?
• Thomas Cook back in British hands
• TUI under financial duress from shipping unit
• Space travel anyone?
• ' SpaceShipTwo' and ' WhiteKnightTwo'
• Two hours to Sydney
• Index to TTI Destination Reports
• Country reports
• Index to Travel & Tourism Analyst
• Index grouped by geographic area
• Special Reports Index