LateRooms up for sale

TUI confirmed that it is to sell its last-minute accommodation brand LateRooms, as rumoured last week.

It has not revealed its asking price, but it said it is expecting to conclude a deal in this financial year.

TUI has also closed down AsiaRooms, which sold discounted hotel accommodation online in Asia.

In the first half of this financial year, to the end of March, LateRooms made a loss of €9 million on a turnover of €31 million.

News of the sale was likely to receive ‘polite rather than wholehearted applause’ said a city analyst.

"At best we can say the business has been a distraction that required an inordinate amount of attention within a group for which it was quite clearly non-core; its below-satisfactory performance and lack of scale symptomatic of TUI’s unwillingness to invest further to make keeping hold of it worthwhile," said Ken Odeluga, senior market analyst at CityIndex.

"Whilst an initiative that should be welcomed, the LateRooms sale is likely to receive polite, rather than whole-hearted applause whilst the group remains quiet on larger non-core operations, arguably including at least some of the group-owned aircraft, if not disposal of all six airlines."

Meanwhile, TUI said it expected the remainder of the Group to see a 10% to 15% rise in profit this year after cutting its operating loss for the first six months by €35 million to €306 million.

In a statement issued by Group joint chief executives Peter Long and Friedrich Joussen, the operator said it was pleased with its results for the first half of the year to the end of March and with overall summer trading.

It said it was confident it would deliver pre-tax earnings of 10% over the next three years. Further details of its future business plan are due to be announced in the operator’s Capital Markets Update to be held later today.

For this summer, sales in the UK are up 6% and 62% of the progamme has been sold. The average selling price is in line with last year. Online sales now account for 50% of all bookings, it said, which is up three percentage points year on year.

"We are particularly pleased with our trading in the UK and Benelux," said Long. "I feel very confident about the UK market. I think all the clarifty now in terms of the election being over we are seeing a continuing recovery in the economy and our customers are seeing increases in their disposable income."

He said TUI’s winter closed out ‘as expected’ with bookings up 1% overall and volumes in the UK ahead of last year.