AsiaRooms: TUI A&D division generates no profits in Q4 of 2009 but AsiaRooms conversion on the improve

Here at BOOT central we try to collect and collate information on Asia's online travel companies. One of those we are tracking is AsiaRooms, the Pattaya based online hotel company owned by the European travel giant TUI. As reported last year AsiaRooms is incorporated into the LateRooms part of TUI.

In May 2009 I managed to collect some information about the performance and results for the TUI Online Destination Services group - which included AsiaRooms, LateRooms, Hotelopia, Hotelbeds and a dozen offline destination brands. The group was renamed the TUI Accomodation and Destination (A&D) division in the second quarter of 09. With the new name comes with a slight realignment of brands and sub-divisions into the following.

B2C Division: LateRooms and Asiarooms.
B2B Division: Hotelopia, Hotelbeds, Holidays Services and TUI Espania
A&D Specialist Division: Intercruises, Aeolos, Pacific World, TUI China

I read this as a greater separation of the operations of the combined LateRooms/AsiaRooms and the other "online" businesses of Hotelopia and Hotelbeds. While the focus of the BOOT is on the B2C group it is worth noting that the A&D section of TUI is big business generating more than £552mm per year in Revenue and more than 8,000 employees. (one page pdf factsheet on the A&D division here)

Last week TUI published their results for the quarter to 31 Dec 2009 (pdf here). From it we can collect another little piece of information on the online activities of TUI and AsiaRooms turnover. Here's what the announcement says

"The A&D sector reported an underlying operating result of £nil (Q1 09 profit £1m) due to foreign exchange translation losses. Profitability in our Online B2C business improved due to better conversion rates in Asiarooms following its switch from a merchant model to a commissionable model. This was offset, however, by reduced volumes in our Destination Services business in Spain."

In one paragraph it is only AsiaRooms out of some dozen or more brands that gets a mention. Nothing specific enough for us to tell whether or not AsiaRooms is profitable or not but they are celebrating conversion improvements. Any other information you have on AsiaRooms?

TUI Online Destination Services Group - digging for details - UPDATED

Update to a post from March 2009. Am trying to collect as much information in one place about the TUI Online Destination Services group. Update drawn from TUI Q1 2009 trading update. Includes a link to a new corporate site (at least one I have not seen before) for the TUI ODS. In turn this points to a one page pdf profile document (called a fact sheet - link will open a pdf). Confirms much of the below but also adds that:

• the ODS headquarters is in Palma Spain; and
  
• "employs circa 8,000 people worldwide"

The "Financial Highlights" Section reports the following

	FY07	FY08	Change
Revenue	£455mm	£502mm	+10.3%
Profit/Loss bf tax	£49mm	£57mm	+16.3%

And here is the original post

Yesterday's post of AsiaRooms spurred some BOOT readers to dig around for more information on the TUI Online Destination Services group. I had initially assumed this group to be focused exclusively on online distribution for TUI (as the name implies. Seems there is more to it. This is the group at TUI that is responsible for B2B and B2C. Here is the introductory paragraph from the ODS page on the TUI Travel PLC 2008 Annual Report & Accounts website.

"Online Destination Services combines a portfolio of B2B and B2C businesses providing destination services to tour operators, travel agencies and individual clients worldwide. This includes selling hotel accommodation, organising meetings, incentives, conferences and events (MICE), as well as providing port services, turnarounds and shore excursions to cruise lines."

Shows there is a strong but not exclusive online bent to the business. Goes on to set out three divisions within ODS.

B2B HotelBeds - online accommodation and offline destination services through:

• Hotelbeds (to tour operators)
  
• Bedsonline (to travel agents)
  
• Pacific World
• Intercruises (ground agent for cruise)

B2B Portfolio Incoming - "network of destination agencies worldwide and includes brand" (not sure what that means). Includes

• TUI China;
  
• TUI Turkey
• TUI Espana;
  
• TUI Hellas; and
• Holidays Services
  

Combined 2008 online results - 18,298,000 bed nights (not room nights) (up 6% y-o-y)

B2C - Online to consumer. Three brands (as we discussed yesterday):

• AsiaRooms (merchant Asian online hotels)
• Hotelopia (Spanish based online merchant hotels)
• LateRooms (UK based retail model last minute site)
  

2008 online results - 6,966,000 bed nights (not room nights) (down 6% y-o-y)

Combined ODS - 2008 underlying profit GBP57.4mm up from GBP49.2mm in 2007

SamIAm also sent through another link for a different profile page for the ODS. At the bottom of this page is a drop down box listing the following (as of date fo this post) as brands for the business. Here is the list of TUI ODS brands from that link:

• ~ Acampora Travel
• ~ Aeolos Liban S. A. L.
• ~ Aeolos Malta Ltd.
• ~ Aeolos Travel LLP
• ~ African Travel Concept
• ~ Aitken Spence Travels Ltd.
• ~ all4ships
• ~ AsiaRooms
• ~ Bedsonline
• ~ Danubius Travel Agency S.R.L.
• ~ Expomundo
• ~ First Choice Meeting
• ~ Flexi Conferences
• ~ Gulliver Travel d.o.o.
• ~ Holidays Services S.A.
• ~ Holiday Travel Israel Ltd.
• ~ Hotelbeds
• ~ Hotelopia
• ~ Inter Cruises
• ~ LateRooms.com
• ~ Medetours
• ~ Meridian
• ~ Mex-Atlántica Tours S.A. de C.V.
• ~ Pacific World
• ~ Pollman's Tours and Safaris Ltd.
• ~ Ranger Safaris Ltd.
• ~ SummerTimes Group - Manahe Ltd.
• ~ Tantur Turizm Seyahat Ltd.
• ~ Travco Dubai L.L.C.
• ~ Travco Group Holding S.A.E.
• ~ Travco Oman L.L.C.
• ~ Travel Scotworld
• ~ Triaena
• ~ TUI Bulgaria OOD
• ~ TUI China Travel Co. Ltd
• ~ TUI Dominicana S.A.
• ~ TUI España Turismo S.A.
• ~ TUI Event Management
• ~ TUI Hellas Travel and Tourism S.A.
• ~ TUI Portugal Ágencia de Viagens e Turismo S.A.
• ~ TUI Service AG
• ~ Tunisie Voyages S.A.
• ~ Turismo Asia
• ~ Ultramar Express
• ~ Ultramar Express Event Management
• ~ Ultramar Express Transport

Profit for AsiaRooms, losses at LateRooms???: Reading the TUI Online Destination Service Groups results announcement

Early this week I posted an interview with AsiaRooms Head of Marketing John Fearon. Was AsiaRooms first major press comment post their acquisition by TUI (if ever). It was a deliberate part of Fearon's plans to bring AsiaRooms out from behind the secrecy curtain. Co-incidently, yesterday parent company TUI published their results for Q4 2008 (ie quarter ending 31 Dec 2008). In the announcement (pdf here) there is a small paragraph on the Online Destination Services group at TUI (ODS) which includes AsiaRooms and UK stable mate LateRooms and the Spanish based Hotelopia.

The paragraph is a mixed story. It says that the ODS group is profitable - generating £1.1m for the quarter - but this is down from £4.2m from last year. And the business delivered £1.2m in synergies. If I read this right I see two things. Firstly that without the synergy cuts, the combined ODS business would have made a loss. Secondly Fearon stressed that AsiaRooms is profitable. Assuming he was referring to the business of AsiaRooms rather than the whole of the ODS group (John correct me if I am wrong), then it likely means that either or both of LateRooms and Hotelopia have slipped into the red and are losing money. If all true, then this provides further evidence of the pain in Europe right now.

Here is an extract of the entire paragraph (again full pdf here).

Online Destination Services Sector
"ODS reported an underlying operating profit of £1.1m, down £3.1m on the prior year (Q1 08: £4.2m). The sector delivered £1.2m of synergies in the quarter (Q1 08: nil) from the integration of the former TUI and First Choice businesses in our incoming agency division, primarily in Spain. The offline businesses, however, suffered from a decrease in volumes in the quarter due to the capacity reductions implemented by tour operators. Additionally, the agencies in Euro destinations experienced a reduction in excursion revenue due to the strengthening of the Euro against Sterling and as a result margins tracked behind last year. The online businesses continue to perform well."

TUI restructures online division - no hints at integration plans, but lots of names invovled.

News out late last week (eyefortravel via Hotelmarketing.com) outlining a new consolidated structure for TUI's various online travel assets. Joan Vilà and Wolfgang Bremer will be joint MDs with Joan being solo MD from 2009 of the new division to be called the Online Destination Services (ODS) group.

On the B2C side this is a consolidation of Hotelbeds, Laterooms, Hotelopia and the infamous Asiarooms into one operating group. The article names eleven people involved with managing, running or board observing the business (not including the separate boards for each of the businesses) but gives not a hint of the plans for how to bring these four businesses together (or how they will all be run out of idyllic location of Palma). It seems to me that there are still four platforms, four inventory connections, four marketing plans etc. I suppose you could call one organisation a start but I see a lot of cooks on the list of this online broth and not much a guide as to how the menu will be put together (how's that for a tortured analogy).