TUI on AsiaRooms and LateRooms for Q4 2010

Mega Euro travel company TUI Group have just published their results for the final calendar quarter of 2010 (PDF here).

Online travel companies AsiaRooms and LateRooms make up part of TUI's A&D Sector (for more background on this group see this post on the 2009 performance, this post on the first re-org that combined AsiaRooms and LateRooms and this post on the operational internal merger of AsiaRooms and LateRooms). Here is an extract from the earning release (note where they say Q1 it refers to calendar Q4)

"The A&D Sector reported an improved underlying operating profit of £4m (Q1 10 £1m), driven by a strong increase in roomnights in our accommodation businesses. Our accommodation wholesalers, Bedsonline and Hotelbeds, delivered a 20% increase in roomnights following continued expansion in Latin America, with particularly strong growth in Brazil. LateRooms.com, our accommodation OTA, increased roomnights by 19% as it continued to increase its market share. The increase in profits was partially offset by marketing and product investment in AsiaRooms.com, where we are increasing our hotel content and translating our website into local languages to address the high growth domestic
markets in Asia."

Accoumpianying spreasheet shows that the revenue for sector increased 7% from £121mm to £130mm.

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?

Agoda and Booking start to integrate inventory - first steps

Thanks to a reader who sent through a screen shot of the search results from a Booking.com page for a secondary destination in China. The page shows 15 Booking.com contracted hotels at the top of the sort order then a line/marker that says

Hotels below are offered by other companies in the Priceline Group

Below this line is a list of hotels in the same destination but provided by Agoda not Booking.com. A click on one of those pages sends you to the Agoda booking system (ie link relationship and white label not full inventory integration).

This is the first hint of integration between the Priceline owned Asian based Agoda and Euro based Booking.com. This is not a full back end integration like we have just seen for AsiaRooms and LateRooms. Mainly because it will be much harder with Agoda and Booking operating on different models (merchant vs commission) and I think that Agoda's owners are still in the earn out process part of the sale to Priceline. When the sale was announced in 2007 the earn out period was listed as three years. Integrations during earn outs are hard as the business working under the earn out is completely focused on achieving the earn out targets rather than internal integration needs. As the earn out period starts to close (ie end of this year), I expect to see even more integration between the two businesses.

Here is a screenshot of the search (Zhuhai China)

AsiaRooms and LateRooms complete merger of operations - my guess from reading between the lines

Here at BOOT central (even while on holidays) we are always on the look out for information about the TUI owned AsiaRooms. After my (relatively) recent interview with AsiaRooms marketing boss John Fearon I started to compile as much info as I could about AsiaRooms as other companies in the TUI Online Destination Services Group including their new push into direct hotel contracing and the commission model. Recent news seems to say that the next piece in the AsiaRooms puzzel is a complete integration with stablemate LateRooms (of Manchester).

I have picked up is more information on executives and team numbers on AsiaRooms care of an update from Siew Hoon at the WebInTravel website called "“Bad boy” no more, AsiaRooms moves to commissionable model". I recommend you read Siew Hoon's interview with LateRooms boss (and therefore AsiaRooms boss) Chris Morris but let me walk you through a highlight from the interview and how it led me to conclude that LateRooms and AsiaRooms are now one.

First to the highlight - we now know the name of person in charge of leading AsiaRooms into the direct to hotel contracting business. According to the interview Kathy Gwinnett will head up contracting as Hotel Relationships Director – B2C Division. She will be backed up by a team of 25 in Asia. Not clear if all contracting staff or have a mixed contracting, database and content role. Also not clear yet where the commission collection group will be run out of. Gwinnett (according to her linkedin profile) is a long term LateRooms employee (8 years) and is Manchester based. Looks like she is heading up a combined AsiaRooms and LateRooms hotel contracting team.

Second to the conclusions - I think this interview makes it very clear that the LateRooms and AsiaRooms business have been fully merged. I draw this conclusion not only from the shared staff members but also from a recent technical glitch at AsiaRooms which resulted in the AsiaRooms website pointing to a LateRooms error message page (c/o the franz). Finally (and conclusively) the sort order results for both LateRooms and AsiaRooms on a search for Singapore are exactly the same. Both have new layouts that but for colours are exactly the same. Means that while we have different brands and site skins, the hotels, ops, tech and execs behind LateRooms and AsiaRooms are likely the same. Means we can expect a very rapid roll out in the new direct to hotel model and further brand integration.

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).