Introduction

TUI Travel PLC (TUI Travel or the Group) was created on 3 September 2007 from the merger of First Choice Holidays PLC and the Tourism Division of TUI AG. It is the worlds leading leisure travel company operating in over 180 countries with more than 30 million customers in 27 key source markets. TUI Travel has over 200 brands which are comprised of market leading mainstream brands and specialist travel businesses. TUI Travel is focused on providing customers with a wide choice of differentiated and flexible travel experiences to meet their changing needs. TUI Travel is headquartered in the UK and employs approximately 50,000 people. It is listed on the London Stock Exchange in the FTSE100 and has the ticker code TT..

Generic Strategy
Porter's generic strategies framework constitutes a major contribution to the development of the strategic management literature. Generic strategies were first presented in two books by Professor Michael Porter of the Harvard Business School (Porter, 1980, 1985). Porter (1980, 1985) suggested that some of the most basic choices faced by companies are essentially the scope of the markets that the company would serve and how the company would compete in the selected markets. Competitive strategies focus on ways in which a company can achieve the most advantageous position that it possibly can in its industry (Pearson, 1999). The profit of a company is essentially the difference between its revenues and costs. Therefore high profitability can be achieved through achieving the lowest costs or the highest prices vis--vis the competition. Porter used the terms cost leadership' and differentiation', wherein the latter is the way in which companies can earn a price premium. Main aspects of Porter's Generic Strategies Analysis

Companies can achieve competitive advantages essentially by differentiating their products and

services from those of competitors and through low costs. Firms can target their products by a broad target, thereby covering most of the marketplace, or they can focus on a narrow target in the market (Lynch, 2003) (Figure 1). According to Porter, there are three generic strategies that a company can undertake to attain competitive advantage: cost leadership, differentiation, and focus.

Figure 1: Source: Porter (1985) Cost leadership TUI is operating their business through cost leadership as the company tries to make cost down and their broad target is to cover more market. Cost leadership by TUI is one of the generic strategies of the company. But major focus of the company is to give more focused market priority and product diversification. If the focus is given to the profit of the group in 2004 and 2005 then it would be very clear that the group is making low profit as it can not keep down the cost of the operations. In 2004 the group profit was +572 million Euro and in 2005 in was +494 million Euro.

Differentiation

TUI has some products as differentiation which demands more prices or it can be said that the added price to a certain product. It is called as premium price. Uniqueness can be made through differentiation and competitive advantages also can be increased through it. Differentiated content is a central pillar of the product and content strategy. TUI is developing a portfolio of exclusive products that no competitor can match or replicate and which is tailored to include additional services and facilities that customers want on their holiday. Every one of TUIs businesses offers products that are tailored to meet the holiday needs and tastes of its customers. In the Mainstream Sector, the level of differentiated product has increased over the last year and currently represents 37% of total holidays. TUI have specific targets in each Sector to continue to increase this level of differentiation and are constantly reviewing and evolving product content. o The Mainstream differentiated products in the UK include Sensatori, designed for couples, and First Choice Holiday Villages, designed for families. In Germany we offer Sensimar, a 5-star spa concept for couples and Robinson Clubs for families. In the Nordics our Blue Villages offer an excellent experience for families. The portfolio of differentiated content not only increases our competitive advantage by distinguishing us from the competition, it also drives higher margins, underpinning our plans to improve underlying operating margins. Differentiated products have an earlier booking profile which increases yields and removes pressure in the lates market, while customers also benefit from a more added-value, unique experience. Feedback shows that customers appreciate the quality and value of these products, and higher satisfaction levels drive repeat bookings and customer retention.
.

Focus

Porter initially presented focus as one of the three generic strategies, but later identified focus as a moderator of the two strategies. Companies employ this strategy by focusing on the areas in a market where there is the least amount of competition (Pearson, 1999). Focuses of TUI for future years for the growth and competitive advantages are, o Growth plans are progressing well in Russia & CIS as the markets in those countries concentrated very hard due to low level of competition in those o Consolidation of the Canadian market through a proposed strategic venture with Sunwing o Investment in Boeing 787 to have new products and in this area no other tour operators are emerging.

BCG Matrix of TUI

The BCG matrix method is based on the product life cycle theory that can be used to determine what priorities should be given in the product portfolio of a business unit. To ensure long-term value creation, a company should have a portfolio of products that contains both high-growth products in need of cash inputs and low-growth products that generate a lot of cash. It has 2 dimensions: market share and market growth. The basic idea behind it is that the bigger the market share a product has or the faster the product's market grows the better it is for the company.

Relative Market Share High High Stars Market Growth rate Question Marks Low

Cash Cows Low

Dogs

Placing products in the BCG matrix results in 4 categories in a portfolio of a company: 1. Stars (=high growth, high market share) - use large amounts of cash and are leaders in the business so they should also generate large amounts of cash. - frequently roughly in balance on net cash flow. However if needed any attempt should be made to hold share, because the rewards will be a cash cow if market share is kept.

2. Cash Cows (=low growth, high market share) - profits and cash generation should be high , and because of the low growth, investments needed should be low. Keep profits high - Foundation of a company 3. Dogs (=low growth, low market share) - avoid and minimize the number of dogs in a company. - beware of expensive turn around plans. - deliver cash, otherwise liquidate 4. Question Marks (= high growth, low market share) - have the worst cash characteristics of all, because high demands and low returns due to low market share - if nothing is done to change the market share, question marks will simply absorb great amounts of cash and later, as the growth stops, a dog. - either invest heavily or sell off or invest nothing and generate whatever cash it can. Increase market share or deliver cash

In terms of the matrix TUI is identified as the Star because it has the largest market share and the cash flow is very high.
TUI Travel PLC (TUI Travel or the Group) was created on 3 September 2007 from the merger of First Choice Holidays PLC and the Tourism Division of TUI AG. It is the worlds leading leisure travel company operating in over 180 countries with more than 30 million customers in 27 key source markets. TUI Travel has over 200 brands which are comprised of market leading mainstream brands and specialist travel businesses. Under the five-year long term cash bonus agreement between Peter Long and First Choice Holidays PLC (now First Choice Holidays Limited), approved at the 2005 AGM of that company, Peter Long is eligible to receive a maximum of 600,000, subject to EPS growth in excess of RPI growth, the Companys TSR ranking against the constituent companies of the FTSE Mid-250 Index (excluding Investment Trusts) as calculated at the award date, and the achievement of personal objectives as determined by the Committee over the period to 30 September 2009.

Strategic options of TUI as Star are, o Strategic options for stars include.

o o o o o

Integration forward, backward and horizontal Market penetration Market development Product development Joint ventures

Ansoff's product / market matrix

Introduction The Ansoff Growth matrix is a tool that helps businesses decides their product and market growth strategy. Ansoffs product/market growth matrix suggests that a business attempts to grow depend on whether it markets new or existing products in new or existing markets.

Existing Products

New Products

Existing Market

Market Penetration

Product Development

Market Development New Markets

Diversification

The output from the Ansoff product/market matrix is a series of suggested growth strategies that set the direction for the business strategy. These are described below:

Market penetration TUI is very much efficient and doing market penetration for the business and real profit of the TUI comes from the market penetration. Market development As the companys traditional mainstream markets mature they continue to look to new markets for growth. During the year, TUI committed to investing in Russia & CIS with our joint venture partner, S-Group Capital Management. TUIs aim is for TUI Russia & CIS to achieve a marketleading position. TUI also have an existing presence in Brazil, China and India and these markets are being investigated and evaluated for further growth opportunities. Product development Customers continue to be more discerning in their holiday decisions, wanting differentiated products and value for money. TUI is developing a portfolio of exclusive products that no competitor can match or replicate and which is tailored to include additional services and facilities that our customers want on their holiday. TUI has seen a trend towards all inclusive packages due to customers seeking financial certainty and wanting to know exactly what their holiday is going to cost. In the UK, it has experienced a 33% increase in demand and in Germany a 50% increase in 2009 versus 2008. The flexibility of the travel products has also become a key customer requirement with an increase in demand for 10 or 11-night holidays, wider choices of departure dates and flights from regional airports. TUIs customers care about the environment and expect a quality tour operator to be addressing these issues on their behalf. In the largest mainstream markets, Germany and the UK, TUI has launched green brochures featuring only holidays that meet the highest social and environmental criteria. Diversification See product development as the company currently not diversifying anything to grow more in terms of market.

SWOT ANALYSIS on TUI

TUI is Europe's largest tourism group having its presence in more than 70 holiday countries. Its vertically integrated model encompasses 70 tour operator brands, nearly 3,200 travel agencies, 279 hotels, and 120 aircrafts. The company is well established with most of its brands holding high recognition within the market. A strong position in the market enables the company to retain its high market share and improve investor confidence. The rising fuel cost, however, can significantly affect the companys revenues.

Strengths Strong market position TUI is Europe's largest tourism group having its presence in more than 70 holiday countries. Its vertically integrated model encompasses 70 tour operator brands, nearly 3,200 travel agencies, 279 hotels, and 120 aircrafts. The company is well established with most of its brands holding high recognition within the market. It is among the three leading tour operators in another eight European countries. TUI is Europes number one tourism company and ranks fifth among worldwide container shipping lines. A strong position in the market enables the company to retain its high market share and improve investor confidence. Comprehensive services TUI owns a network of travel agencies and tour operators which offers comprehensive services.TUI owns a network of travel agencies and tour operators, including Airtours, Thomson, Star Tour, American Holidays, Discount Travel, Gebeco, Holland International, Nouvelles Frontieres, Portland Direct and Arke, active in 18 European markets. It also operates several

airlines, including: Arkefly, Corsairfly, Jetairfly, TUI Airlines Belgium, TUIfly Nordic Hapagfly, and Thomsonfly. The TUI Hotels and Resorts division offers a portfolio of hotels across key destinations, including Spain, Greece, Egypt, France, Turkey, Tunisia, the Balearics, the Canary Islands and the Caribbean. The company also offers cruises through its Hapag-Lloyd Kreuzfahrten subsidiary, which operates four luxury and premium class cruise liners. TUI shipping activities are contained within its Hapag-Lloyd Container Linie. With a broad spectrum of services, the company's operations span the whole tourism sector, covering all stages of a holiday: from retail, tour operating, flying and accommodation up to services at the holiday destination. A wide range of services increases the cross-selling opportunities for the company and also ensures cost savings due to economies of scale. Strong performance of key segments The company has witnessed strong performance of its key segments in the last few years. Its shipping segment revenue has increased at a CAGR of 53% to reach E6,254 million in 2006 as compared to E2,690.6 million in 2004. Furthermore, the companys tourism segment too has witnessed increase in revenue at a CAGR of 3% , up from E13,335.9 million in 2004 to E14,083.9 million in 2006. Strong performance of its key segments has positively affected top line of the company.

Weaknesses Weak profitability The company has recorded declining profitability in the last few years. Its net profit has declined from a surplus of E528.2 million in 2004 to a deficit of E893.3 million in 2006. Its net profit margin too declined from 3.2% in 2004 to -4.3% in 2006. By contrast its competitor, Expedia recorded a strong profitability. Expedias net profit increased at a CAGR of 22% to reach $244.9 million in 2006 as compared to $163.4 million in 2004.Weak profitability could affect the company's growth plans. 10

Dependence on European operations The company is heavily dependant on Europe for its revenues. Europe accounts for about 92.4% of the company's total revenue. North America and South America accounted for only 6.9% of the total revenues in the fiscal year 2007, while Rest of Europe accounted for about 2.2% of its total revenues in 2007.Concentration of operations in a single region increases the company's exposure to local factors such as lower demand, severe weather conditions, labor strikes, change in regulation and economic conditions thereby restricting property and income growth. Opportunities Alliance with American Express American Express, and FIRST Business Travel, the business travel sector of TUI Leisure Travel, entered into partnership to look after small and medium-sized enterprises (SMEs) in Germany in February 2007. American Express Business Travel, a division of travel and finance service provider American Express International, develops solutions worldwide for optimizing travel management at companies. American Express will be contributing its extensive know-how, its experience and its holistic business concept in the business travel sector along with the tools it deploys such as benchmarking, consulting and a worldwide hotel and hire car programme. Alliance with American Express would enable to the company to enhance its market share.

Growing hotels, resorts and cruise line sector Hotels, resorts and cruise line sector are witnessing rapid growth. The global hotels, resorts and cruise lines sector generated total revenues of $468.7 billion in 2005, this representing a compound annual growth rate (CAGR) of 6% for the five-year period spanning 2001-2005. Looking ahead, the global hotels, resorts and cruise lines sector is expected to reach a value of $675.3 billion by 2011, equating to a CAGR of 7.6% since 2006. The improvement in annual average growth rates reflects a return to the industrys previous strength during the next five years. Indeed, at times during the 2007-2011 period, demand for hotel rooms on a global basis is 11

forecast to exceed supply, leading to an increase in average room prices. Much of the returning popularity of tourist accommodation can be attributed to the improving economic environment, although the rapid growth of the budget airline sector is also having a significant impact on industry revenues. Growing hotels, resorts and cruise line sector would positively affect its tourism division. Recovery in business travel In recent years, the business travel market, which was affected by lower transactions in weak economic conditions, is again showing signs of recovery. With incentive fee revenues in the industry returning to normalcy, the company is expected to witness stable business conditions for the next two years. Furthermore, the industry is also experiencing increased occupancy levels and new bookings. The company provides facilities to the business and leisure travelers. An increase in demand for business travel will open up new growth opportunities for the company. Threats Competition from low cost airlines The rapid growth of low fare, low cost airlines has had a profound impact on industry revenues that pose a threat to traditional network carriers. While the traditional carriers are experiencing severe difficulties, withdrawing from routes and cutting staff, the low cost sector continues to expand at a tremendous pace. There is evidence that the low cost carriers are even becoming dominant players on a significant number of intra-European short haul point-to-point routes. The extent to which this expansion of the low cost carriers will affect the traditional airline hub-andspoke networks poses interesting questions for the European industry and policy market. Liberalization in Europe has opened tremendous opportunities for the low cost carriers. The improved financial performance relative to traditional network carriers suggests that the low fare, low cost airline threat will significantly intensify over the next few years. TUI's airlines business operates a total of 120 aircraft. Intense competition from low cost carriers could adversely affect the company's operations.

12

Rising fuel costs The cost of fuel in many parts of the world has increased substantially in recent years. Crude oil prices are projected to average $67 per barrel for 2007 and $71 per barrel in 2008, while the annual average refiner acquisition cost of crude oil is expected to increase from $64 per barrel in 2007 to nearly $69 per barrel in 2008. As a result, there is increasing pressure on the local governments to increase the energy prices in the regulated market. Also, energy prices are witnessing increase in the unregulated markets. Aviation fuel and ship fuel account for substantial proportion of operating costs for TUI. If this trend persists, the company faces the risk of sustained high fuel prices, negatively impacting its future profitability. Weak economic outlook for Eurozone According to IMF report the GDP growth in Eurozone is expected to slowdown in near future. The GDP growth in the Eurozone is expected to decline from 2.2% in 2006 to 1.6% in 2008.The weakening economic outlook could depress consumer spending which could adversely affect the companys margins.

13

PEST Analysis of TUI

Political Factors o Tourism is one of the most heavily regulated industries. As a global organisation TUI Travel has a public affairs team that works with governments across oits key source markets to address issues that impact our industry and our customers. o The Package Travel Directive is one issue that has come to the fore following the collapse of a number of airlines including XL Airways and one on which TUI has been campaigning across its key markets. The Package Travel Directive came into effect in 1990 and its provisions were introduced into UK law through the Package Travel Regulations in 1992. The Package Travel Directive set out travel organizers responsibilities to their customers in the event that an operator fails. In the EU, anyone who offers package holidays must comply with the Package o Travel Directive. Following campaigning by TUI Travel and the industry, the European Commission has recognized that the Package Travel Directive needs to be updated in line with the significant changes that have taken place in the industry over the last 17 years, most notably the use of the internet for booking holidays. TUI is ensuring that TUI Travels views on this regulation and the protection customers should expect are heard. As part of this, Peter Long has met with the European Commissioner for Consumer Affairs to submit companys recommendations.

The economic factor o It became clear in 2008 that the worlds financial system was in jeopardy as many of its leading banks were suffering liquidity issues and incurring losses, leading them to be significantly undercapitalized. o In early 2009, all indicators pointed towards an increasingly challenging operating environment with the deterioration of the world economy, financial uncertainty and low consumer confidence.

14

o Additional challenges became apparent with the continued volatility of currency and fuel prices as well as the outbreak of the H1N1 virus. o More than one year on from the banking crisis we are seeing some indications of economies beginning to bottom out but economic data is still mixed. There appear to be signs that the governments intervention in the banking crisis is starting to take effect and there is improving consumer confidence and an increasing willingness to spend. However, unemployment is predicted to rise to 11% in the UK in the second half of 2010 and although there has been recent improvement in the US, unemployment remains at 9% (Oxford Economic Forecasting September 2009). o In Germany and France, unemployment is expected to continue to rise in 2010, remaining high until 2012. During 2009, the US and the major European economies (UK, Germany and France) have seen some quarterly increases in GDP. However, annual GDP growth is not expected to resume until 2010.

Social factors Consumer sentiment TUIs customers continue to look forward to their annual holiday. They continue to want to travel abroad, experience new countries, cultures and sunnier climates. Company is seeing the following customer trends:

o Brand strength Customers are loyal to reputable, established, high-quality brands (power brands) as they seek to de-risk their holidays and book with a tour operator that gives full financial protection. TUI has some of the most recognized and highly trusted brands in the industry. o Destinations A number of non-EU countries including Egypt and Turkey continued to grow strongly in popularity in 2008/2009. The number of our customers traveling to the Eurozone has 15

decreased but these destinations including the Balearics, mainland Spain, Portugal and Greece still remain our top short haul destinations. For long haul destinations the Dominican Republic, Thailand and the United States continually provide resorts that are popular and value for money. Despite the impact of swine flu, Mexico has recovered well following investments and incentives by the local Government to attract tourists back to the resorts. New destinations introduced in 2009 included Kenya and Canada.

Technological factor o New technology regarding new aircrafts and e-business and services are one of the features of technological development during the last few years

Porters 5 forces

The threat of substitutes

Minimal threat from other companies like Thomas Cook and Airtours. Usually the time and cost advantage of the low-cost offers far outweigh some of the increased comfort and flexible offers from those other companies

TUI buy over 150 million bednights per year, making its one of the largest distributors of accommodation globally. Its scale gives a competitive advantage when negotiating with suppliers, allowing us to offer excellent value to our customers.

The threat of new entrants Weak profitability can lead company towards a position from where company can be stucked and mibh not move forward to hold the major portion of the market. This chance will be taken by new entrants. Its net profit margin too declined from 3.2% in 2004 to -4.3% in 2006.

TUI's airlines business operates a total of 120 aircraft. Intense competition from low cost carriers could adversely affect the company's operations. New entrants are very frequent in this term

16

The power of suppliers

The price of aviation fuel is directly related to the cost of oil, as an individual company TUI does not have the power to alter this. The dependence on spare parts from one manufacturer could pose a risk. Due to financial crisis all over the world suppliers of goods and other raw materials that are needed for the business and service products of TUI can raise the price significantly. TUI hardly can do anything regarding this issue.

The power of buyers

Buyer power within the travel and tourism industry and especially the low-cost market is relatively strong, as customers will often go around for the better price, particularly with the dependence that the low cost offers has on Internet sales. Price discrepancies can be easily found and exploited by the consumer, meaning that the operator must keep a regular check on prices. The demand of low price offers from buyers pressurize TUI to provide low cost offers as much as it can.

Need for customer loyalty because of low switching costs Customers have the Civil Aviation Authority (CAA) on their side which provides: 1. protection against the consequence of travel organiser failure for people who buy package holidays, charter flights and discounted scheduled air tickets; and 2. licenses airlines and ensures compliance with requirements of European and UK legislation relating to financial resources, liability and insurance of airlines.

Rivalry among existing firms

Thomas Cook, Air tours, Ryan air, BMIbaby, MyTravelLite and Buzz are major competitors of TUI in the UK. Virgin Express, Hapag Lloyd Express, Germanwings and Air Berlin already are or might become competitors in the light of future expansion plans. Ryanair is the only one of these so far to have succeeded and shown a continuous yearly profit.

A growing number of tour operators (like Thomas Cook and Airtours) are selling air only scheduled seats to reduced prices. British Airways and other traditional carriers out of the UK are competitors as well but on a lower scale as they target different market segments.

17

Stakeholder
TUI define stakeholders as those individuals or groups who affect, or are affected by, its activities. Communicating with the groups who have an interest in our Company and its activities helps us develop as a business and incorporate respect for the environment and people into the way we work. Company aspires to lead the travel and tourism sector and to lobby for sustainability to be embraced as a business issue on which the future health of the industry depends. TUI Travels senior management are regular public advocates for more sustainable tourism, in the media, at industry and governmental events, and with other audiences. Colleagues TUI Travel carries out an annual survey of our senior leaders which measures engagement and alignment with the vision and values, and contains two questions on sustainable development. View survey results from 2007/08. Many TUI Travel businesses conduct internal surveys on topics that matter to our people. Where possible, key questions including those on sustainable development are aligned Groupwide so we can measure our colleagues opinions in their entirety. Customers TUI Travel businesses request feedback from customers regularly, and some offer the opportunity to comment on the environmentally and socially responsible aspects of their holiday (view Our Customers page for details). In 2007/08, it commissioned research into attitudes to sustainable development issues in both the UK and Germany, which informed our customer communications in both markets. Investors

18

TUI Travels 2008 Annual Report & Accounts contains an extended section on sustainability in line with the new requirements of the Operating and Financial Review (OFR). TUI Travel is listed on the FTSE4Good Index in recognition of its transparency, and for meeting strict social, environmental and governance standards. It liaises regularly with institutional investors on its performance and our management of sustainability risks. TUI Travel makes an annual submission to the Carbon Disclosure Project, an investor coalition representing 385 signatory investors and combined assets of $57 trillion (36 trillion). Each participating companys submission is scored and benchmarked with respect to its approach to managing climate change risk and opportunity.

Industry partners Across the Group active members of industry forums on sustainability. For example, TUI Travel in the UK chairs the Federation of Tour Operators (FTO) Responsible Tourism Committee, responsible for pioneering the Travelife Sustainability System, and is a core partner in the Tourism 2023 initiative, through which we are working to create a robust, inspiring and realistic vision and strategy for the UK outbound leisure industry. TUI Travel in The Netherlands is a member of IDUT, the Dutch national network for sustainable development of outbound tourism and chairs the sustainable development committee of the Dutch Association of Travel Agents and Tour Operators (ANVR). TUI Travel in Germany, Austria and Switzerland is working in partnership with Deutscher ReiseVerband (DRV), the German travel industry association, on the creation of Futouris, a new platform for sustainable tourism (see TUI Central Europe page for details). Suppliers Across TUI Travel, many of its businesses have schemes to help suppliers improve their environmental and social performance. The Sustainable Development department and Sector

19

Coordinators are working with purchasers across the Group to advance this work (see Destinations page for details). Stakeholders in destinations All its businesses work with local authorities, communities and NGOs on relevant issues and provide in-kind and financial support to a range of charities and community organisations in destinations. TUI aim to consult with communities wherever we are involved in sustainability-related destination projects. For example, TUI UK & Irelands project partner The Travel Foundation (view Strategy development in 2007/08 page for details) does this in a number of destinations by convening a committee with the local community, including representatives from government, small suppliers, community and trade associations, the hotel industry and local tour operators. TUI advocates for sustainable management of destinations. For example:

The Managing Director of TUI UK & Ireland presented on the industrys climate change challenge to 90 Ministers of Tourism at the World Travel Market in November 2007 TUI Travels Chief Executive presented on sustainability at the Switzerland Vacation Day conference in April 2009 The TUI Nordic Product Director presented on social responsibility at the Bangkok Travel Fair in June 2009 TUI Travels Head of Sustainable Development took part in the sustainability-related Pacific Asia Travel Association (PATA) CEO Challenge in April 2008 TUI Deutschland is working with the Environment Ministry of the Balearics Government to deliver sevral projects that will protect the natural environement of the islands (view TUI Central Europe page for details).

Government

20

In all its source markets, we have open lines of communication with government departments that have an interest in the leisure travel industry. TUI also use its relationship with destination tourism boards to influence destination governments on sustainability issues. TUI Travel deals with the EU and source market governments at Company level and through national and international travel trade associations and is a member of the International Federation of Tour Operators (IFTO) and the European Travel Agents and Tour Operators Associations (ECTAA). TUI Travels Director of European Affairs represents the Group in Brussels. Each source market has a person responsible for external affairs at a national level. For example, in Germany we work with the Federal Agency of Aviation (LBA). In the UK, TUI meet regularly with government departments on issues such as consumer financial protection the Code of Practice for Disabled Passengers, aviation and the environment. TUI Travel is an active participant in initiatives to promote sustainable development within travel and tourism. Some examples include:

It is consulted by the World Economic Forum for its report Towards a Low Carbon Travel & Tourism Sector presented in May 2009 at the World Business Summit in Copenhagen in preparation for the UNFCCC Copenhagen conference in December 2009

TUI Travel is a member of The Tour Operators Initiative (TOI), a non-profit association working closely with UNWTO and UNEP to promote best practice in sustainable development among tour operators

Non-governmental organisations (NGOs) Across the Group the company works with specialist NGOs where relevant. For example, TUI Travel in the UK works closely with The Travel Foundation, an NGO founded through collaboration between the UK Government and the outbound tourism industry. TUI UK & Irelands Managing Director is a trustee of the charity, which exists to educate customers, develop business tools for change and establish practical sustainable tourism projects in

21

destinations. Several UK-based TUI Travel businesses support the charity through matched customer donations, and have raised over 1.5 million since its launch in 2003. A number of TUI Travel businesses have signed the Child-Protection Code, developed by UNICEF, UNWTO and ECPAT (End Child Prostitution and Trafficking). At Group level, we have regular contact with NGOs such as the Born Free Foundation and with TUI Travels nominated charity, the Family Holiday Association.

22