Putting digital at the centre of your operation may not be easy for a giant-sized traveI company but you only have to look at the numbers to see that it’s a worthwhile exercise. Sally White reports

There is no stopping Germany’s TUI! Its shares took last December’s merger with the company’s UK offshoot with barely a break in their strike. Mind you, they’ve been steady risers from the €3.12 low back in November 2011.

Now trading at around €15.39 (1,127p) they’ve risen 20% over the last year. The pundits are confident that since Tui has become the world’s largest integrated travel group they are likely to go on running.

‘Outperform the market’ - is a nearly unanimous expectation among the analysts following the shares. Price forecasts, judged to be quite possible, approaching 1,400p are common.

December’s all-share nil premium deal has created a whopping global tourism business and the company is now worth €8.3bn. Group operations extend through hotels, airlines and ships. There is a book-load of travel brands including TUI Leisure, TUI.com, 1-2-FLY.com, ROBINSON.com, Discount Travel.com, Airtours, LastMinute.com, TUI Travel, Thomson,Crystal Holidays and First Choice to cruise brands Hapag-Lloyd Kreuzfahrten and TUI Cruises.

Having reported barnstorming and analysts’ forecast-trouncing figures for 2014 – earnings up 14% at €869m on sales 1.3% higher at €18.7bn – Tui immediately said there’s more of that to come. Its 2015 goal is an earnings figure of €1bn. Anyway, it is in print as promising a 10-15% earnings increase and a revenue increase of 2-4% this year.

Oozing justifiable confidence chief executive Friedrich Joussen told a press conference, according to Bloomberg, that: “We have now launched the growth phase, which will gain momentum through the merger. We are perfectly positioned for further, accelerated growth in the future.”

Digital strategy helps more bookings online

While the UK leads the way in Europe in on-line sales, Spain and Italy are coming up fast. Talking just before the merger, TUI Travel (the UK side of the business) said it was selling more holidays online (38% of mainstream holidays, up 3% on 2013, increasing revenue to £4.1bn) with bookings up 6%.  Like Thomas Cook (Pamela Whitby interviewed Chief Digital Officer Marco Ryan earlier this month) strategy in the group has become digitally orientated. There is no other way for travel companies to be today.

TUI Travel says that in December its TUI Digital Assistant app, driving customer engagement across the customer journey, had had a million downloads. New functionality includes ‘search and book’ on Thomson and First Choice iPad apps. TUI says that this reflects the continuing growth in traffic from mobile devices, including tablets. Some 36% of all web visits came from a mobile device in the full year, up from 25% the previous year.

Some 36% of all TUI’s web visits came from a mobile device in the full year, up from 25% the previous year

What’s more the smartphone conversion rate had grown by slightly under 50%. Future improvements planned for the app include online check-in (expected this year), flight extras, travel documents and hotel check-ins.

While confidence in TUI’s management seems widespread in both London and Frankfurt stock markets, its job is not seen as a doddle. The markets it covers are all very different.

The UK is increasingly becoming an on-line market, with over 50% of consumers having given up on using traditional travel agents, according to the European Commission Digital Travel Portal (ECDTP). Italy and Spain had the largest growth numbers last year, at 18.3% and 13.8% respectively with online travel sales driving overall ecommerce in these two countries. In Spain, online travel sales account for 60% of overall ecommerce, in Italy, for 48.6%.

However, travellers in Germany preferred travel agents for more expensive travel arrangements, yet were happy with online booking for cheaper packages. In Germany, online travel sales have even been decreasing since 2012, with a drop of 0.3% per annum expected when 2014 is counted.

In France, the growth of online travel sales has been slowing down, with an increase of 2.2% growth in 2014. Online travel sales represent 19.5% of all online sales in France.

Since TUI shares have done so much better than most competitors, markets are keeping a close look out for any clues to its trading performance (just in case). For one, the latest counts on European website traffic pages. The last count flagged up on ECTDP (for 2013) showed the websites of Deutsche Bahn and Groupe SNCF doing best, with 24 and 23 pages per visitor, respectively. TUI, however, was not far behind with an average of 21 pages. Hopefully, now they’re No.1.