High flier takes helm at troubled Thomson Travel

Business Profile: Peter Rothwell's new job is to reverse the decline of Thomson Travel

Peter Rothwell looks distinctly unimpressed at the prospect of an evening at the Hanover Novotel. It's not glamourous, but then neither are the package holidays sold by his German employer, Europe's biggest travel company TUI.

Peter Rothwell looks distinctly unimpressed at the prospect of an evening at the Hanover Novotel. It's not glamourous, but then neither are the package holidays sold by his German employer, Europe's biggest travel company TUI.

We meet in the bar for a pre-dinner drink. Mr Rothwell, a travel industry veteran despite his age of 43, has just been unveiled as the successor to Charles Gurassa, the man responsible for the bidding war three years ago that saw the then-Preussag rescue Thomson Travel from impending stock market oblivion in a £1.8bn deal.

Like me, Mr Rothwell has jetted in from London for TUI's annual results presentation the following day. Unlike me, the fast-talking Thomson boss sat in the cockpit, not economy class. Of his own aircraft. Painted in the company's corporate blue, it matches the main TUI hangar, and is parked outside on the edge of the runway at Hanover airport.

Mr Rothwell is nothing if not loyal to the company he joined as a graduate after leaving university; the aeroplane is emblazoned with G-OTUI in big red letters down the side. "It's rather sad, I know, but for a couple of hundred quid I couldn't resist," he admits, somewhat sheepishly. And no, they don't pay him extra for the free advertising.

Mr Rothwell steps up to the top job during cloudy times for the travel industry. The 54 per cent plunge in operating profits last year at TUI Northern Europe, which also includes Ireland, Norway, Finland, Sweden and Denmark, tells the tale of what Mr Rothwell says are "dire circumstances for a travel business". As if the effects of 11 September, war in Iraq and the outbreak of the Sars virus weren't enough, the market has also coped with the soaring popularity of low-cost carriers such as easyJet and Ryanair. Margins have come under pressure across the board and one of the main tour operators, MyTravel, is on the brink of financial ruin. The internet is opening doors to holiday choices that just aren't found in a brochure on a Lunn Poly shelf.

So has the traditional package holiday had its day? Mr Rothwell thinks that "as long as the package can stay relevant and attractive and cost effective", it has a future. "It's very easy to think that everyone wants to travel on scheduled airlines to five-star hotels, but the reality is that the majority of people need to be very conscious of the value of money. Because we fill the assets, fill the planes, fill the beds, package holidays are extremely good value for money compared with doing it yourself."

Not that Mr Rothwell is Lunn Poly's top customer. He prefers to fly himself around. This means chasing the sun when he's in the UK or heading to places "which are not the core package destinations" in the summer. Sardinia and Corsica are the current favourites: he chooses his hotels for "food and ambience" rather than five-star luxury.

He tends to take more packages in the winter, when he wastes as much time as possible skiing, although even on the piste the energetic Mr Rothwell manages to be suitably original. Ever in search of the ultimate buzz, he tends not to ski "just downhill". Instead, he prefers "skinning". This entails putting "skins" (I don't ask which animals are best) on the bottom of his skis and walking uphill for several hours before bombing back down. Heli-skiing is also fun, so I'm told, although strictly speaking "that's cheating". Give it a few more weeks and Mr Rothwell will even be able to fly his own helicopter – he's learning because he wants to be able to fly in and out of his garden and plus, he says, "it's really cool". I can practically smell the adrenaline coursing through him as we chat.

Since Thomson joined what is now known as the "World of TUI", it has borne its share of suffering along with its German parent. About 1,000 jobs went from the northern operations last year, most of which were in the UK. But its travails pale into insignificance when contrasted with those of its arch-rival, MyTravel, where Mr Rothwell spent seven years with his partner in crime and current finance director, Will Waggott. "I've done my years at MyTravel," Mr Rothwell admits, laughing nervously.

Part of the then-Airtours team that masterminded an abortive bid for First Choice in 1999, Mr Rothwell says that not all of MyTravel's problems stem from the blocked deal. "There have been some significant own-goals, clearly, from the MyTravel camp. You cannot blame their woes on the current economic or geopolitical circumstances. However, if you are in a weak position, things like war, pestilence, plague and so on will hit you far harder."

At the time, in the early Nineties, Mr Rothwell was enticed to MyTravel by the chance to swap family owned Thomson, which was "suffering from management constipation", for the prospect of working for MyTravel's then-boss, David Crossland, and the challenges of helping to run a public company. "Working for David Crossland was very exciting. He's a tremendous entrepreneur and probably the best tour operator that anyone has come across," Mr Rothwell says.

Like Mr Crossland, the svelte Mr Rothwell was an early convert to the world of travel. As a student, he worked as a courier for Eurocamp and, later, took American tourists round Europe on buses, which was not only "good fun" but "very lucrative".

"It really sharpened me up because I come from a reasonably protected background. My father was a professor of French, it wasn't at all commercial, and all of a sudden you were responsible for all these people's welfare, their geography, their little disputes, their crying, their whatever it might be."

He confesses to one incident that probably doesn't stand out on his CV. "I sent a whole bunch of people back from, I think, Paris to Heathrow, waved them all goodbye and was just counting my tip when I realised that I'd actually got in my pocket all of their onward tickets. So that's 52 people's tickets from London to somewhere in the States at the cost of oh, about £30,000. With them going to be stranded in London and completely ticketless. And that was just a complete and utter panic. I just went white."

At least the years spent honing his language skills on the road in Europe will pay off at his first board meeting of the DAX 30 group. After three years of speaking English for the lingaphobic Mr Gurassa, TUI's directors will be able to revert to German. Why doesn't it surprise me that Mr Rothwell is fluent?

PETER ROTHWELL - PILOT ON COURSE

Title: chief executive TUI Northern Europe

Age: 43

Education: Masters degree in French and German from Oxford

Career history: Student jobs as Eurocamp courier and guide for American tourists. Joined Thomson Holidays in 1982, became marketing director at Lunn Poly before leaving to join Jetset. Returned to Thomson in 1993 as sales and later purchasing director. At MyTravel (then Airtours) as managing director of Airtours Holidays. Returned to Thomson in March 2002 as chief operating officer; made chief executive of TUI Northern Europe in October 2002.

Interests: Flying (light aircraft and helicopters), skiing, sailing.