All Inclusive Holidays Jane Ashton Group Director Sustainable Development WTM 8th Nov 2011

TUI Travel PLC The worlds leading international leisure travel company 30 million customers from 27 source markets Operating in over 180 countries 140+ aircraft and 3,000+ retail shops in Europe 49,000 colleagues

Mainstream Sector Emerging Markets Sector Accommodation & Destinations Sector Specialist & Activity Sector Classic TO business / market leading Portfolio of specialist & activity companies The world of TUI Destination services & online accommodation Our structure

April 2011 – TUI UK Brand Repositioning A holiday where customers dont have to worry about how much theyre spending. Flagship hotels: Holiday Villages A holiday where everythings just right. Flagship hotels: Sensatori & Couples

Why did FC brand itself The Home of AlI Inclusive? Brand differentiation Mintel 2010: 32% agree All Inclusives…are my preferred kind of package All Inclusives 30%+ growth First Choice was already 2/3 All Inclusive For First Choices family market AI offers peace of mind Non-AI hotels moved to Thomson and some Thomson AI hotels to First Choice

Press reaction AITO: The First Choice announcement is good for the budget-conscious tourist, disinterested and incurious about their destination, who cares little or nothing for their host country. First Choice all inclusives: Is it profit over people? Press reaction 95% favourable, but some trade sceptics:

Press Reaction First Choice has a progressive reputation in responsible tourism. The challenge it faces is in implementin g this across its business.

Common claims about All Inclusive First Choices Experience Poor customer satisfactionFC AI customer satisfaction scores measure equal or higher than non-AI, apart from location Customer discretionary spend is lower FC AI customers take 14% less currency on holiday than non-AI Customers dont leave hotelFC AI customers take 20% more excursions than non- AI customers AI is a passing fadAI customers as likely to return as non-AI AI hotel occupancy is higher and sells earlier AI has poor employment recordResearch done by Travel Foundation, GIZ and Overseas Development Institute finds differently LeakageODI research at Holiday Village Turkey last year showed 90+% of hotel expenditure on Turkish goods Destination impactWide scale switch to AI can impact surrounding tourism businesses. Would customers be travelling at all without AI? Issues – far from black and white

TUI UKs Holidays Forever Commitments

Research currently underway With Overseas Development Institute – in-depth socio-economic impact studies at 3 Holiday Villages to agree indicators for monitoring, improving and reporting economic impact of our flagship differentiated hotels. With Travel Foundation to measure and improve local purchasing policies and customer discretionary spend at All Inclusives – 3 locations, starting with Tenerife With Travel Foundation to build capacity with local farmers to supply hotels in the Dalaman area with fresh produce

AI is here to stay, and critical for destination livelihoods against background of economic uncertainty Like all forms of tourism, AI can be made more sustainable Our focus is for First Choice All Inclusives to be the best, for experience and sustainability Focus on impact, research and action rather than polarised debate All Inclusive Holidays

Thank you!