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.

The ODS Sector consists of three divisions. The B2B business is split into two divisions, Hotelbeds and Portfolio Incoming. The Hotelbeds division delivers accommodation services (online) and destination services (offline) through brands such as Hotelbeds (services to tour operators), Bedsonline (services to travel agencies), Pacific World (leader in Asia) and Intercruises (the world’s largest provider of ground handling services to cruise lines). The Portfolio Incoming division operates through a network of destination agencies worldwide and includes brands such as TUI Espana and TUI Hellas.

The B2C division specialises in supplying online accommodation through its three businesses: Hotelopia, a well established brand in Europe, LateRooms, a leading seller of late availability in the UK, and AsiaRooms, the highest traffic B2C accommodation business in Asia.

The ODS Sector reported underlying operating profits of £57.4m, an improvement of 17% (2007: £49.2m), with all divisions contributing to this growth.

Within the B2B businesses, the online accommodation businesses performed very well, with 23% growth in bednight volumes and a 6% increase in revenue per bednight over the prior year. Hotelbeds and Bedsonline were both successful in increasing market share within its mature source markets of Spain and the UK as well as further expanding into newer source markets such as Brazil, USA and Mexico. The offline business also delivered profit growth, with an increase in passenger volumes of 3% to 3.9m (2007: 3.8 m).

Within the B2C division, Hotelopia increased volumes by 16%, mainly due to strong growth in its European Cities’ products. However, commission rates decreased in the more competitive mature markets of Spain and the UK as a result of greater competition from online participants. In LateRooms.com like–for-like volumes in 2008 were 21% ahead of the prior year. LateRooms.com continued its strong growth as a result of its differentiated late availability model and a highly effective online marketing campaign and, during the year, LateRooms.es was successfully launched into the Spanish source market.

The Portfolio Incoming division grew passenger volumes by 10%, with revenue per passenger remaining in line with 2007. The division delivered profit growth in 2008 despite margin pressures in some of the more mature source markets, such as Spain, where price competition increased as the tour operators cut capacity.

The integration of the former TUI Tourism and First Choice businesses within the ODS Sector is progressing well and synergies of £2.0m were delivered in 2008.