TUI Travel is moving from multiple online and back end platforms to a single platform in a bid to cut costs and increase profits.
In its latest results, TUI said that it has been successfully implementing its group-wide business improvement programmes this year, achieving total savings of £46 million. Some £6 million of these savings were made in the UK business.
“These cost savings were primarily driven by back office restructuring and IT platform replacement across a number of markets,” the travel company said in its preliminary results for the year ended 30 September 2013.
“Our One Mainstream platform is already in place and yielding tangible benefits. The move from multiple platforms to one core platform is a key driver of efficiencies going forward.”
TUI is 18 months into a transformation project called ‘One Mainstream’, led by a ‘Mainstream Board’, that aims to use the scale of the business to improve efficiency.
“Since the creation of the Mainstream Board, a lot has been achieved,” the company said.
“Within digital transformation we are taking a single approach across booking systems, platforms, customer engagement tools and digital content."
As part of its digital transformation strategy, TUI’s websites are on a new platform that has changed its narrow search function to a “broad, faceted” search. Faceted search is a way of browsing and searching in a set of data by applying filters.
“This makes it easier for customers to search and book their ideal holiday,” said TUI, adding that it had also led to higher conversion rates, for example, on its Thomson website.
The new platform also generates “significantly” more landing pages for the customer, which has improved its SEO performance. This has led to a growth in free traffic to its websites and therefore lower distribution costs, TUI said.
The improved web experience, as well as the launch of the MyThomson app, which allows users to plan their holidays, in the Apple App Store in June, has helped boost custom in TUI’s UK business.
Online bookings accounted for 47 percent of all bookings, up three percentage points year-on-year, and an increase from around 30 percent in 2007. Underlying operating profit in the UK increased £54 million to £251 million during the year.
Across the group, TUI said that £3.7 billion of mainstream revenue was booked online, representing 35 percent of sales. It aims to have half of bookings made online by 2017.
One mobile platform
TUI launched the MyThomson digital assistant app as part of its mobile strategy to maintain ongoing customer relationships, and launched the German version of the app, Meine TUI in November. After having nearly 200,000 downloads of the apps to date, TUI plans to roll out the mobile app to other markets next year, and to add new functionality, such as mobile boarding passes, seat selection and upgrade, search and book functionality and an ability to create personalised recommendations and offers.
“To connect our people with our customers we are digitally enabling our in-resort teams with tablets to effectively connect our physical presence with the digital world,” TUI said.
In its specialist and activity business, which focuses on activity and experience-based holidays, TUI is investing in online platforms to improve booking and search functionality. It is also standardising back office systems.
“Our specialist businesses are making good progress in consolidating their finance and reservation systems to leverage our scale across multiple brands and continue on their journey of standardisation,” the company said.
Despite the progress in online sales, however, TUI reported a decline in its Accommodation OTA (online travel agent) business, which includes the LateRooms.com brand in the UK.
“Accommodation OTA TTV (total transaction value) declined by six percent to £422 million during the year. This decline was driven by a delay in migration to a new online platform for LateRooms,” TUI said.
But it added: “The new platforms are now in place, delivering an improved user experience. LateRooms continues to benefit from strong brand recognition and SEO visibility.”
Furthermore, the company has designed and delivered mobile-optimised websites for LateRooms, AsiaRooms and Malapronta, and made a “number of significant improvements” to the LateRooms and AsiaRooms mobile apps.