Growth activities

TUI plans exclusive branded Destination Experiences

TUI wants to profit from the growing market for destination experiences by offering exclusive and branded excursions and activities.

May 07, 2018
TUI wants to profit from excursions to markets (such as here in the Dominican Republic) and other destination activities that get holidaymakers out of their hotels.
Photo: FVA Dominikanische Republik

Europe’s largest tourism group sees plenty of growth potential in this niche business by differentiating itself from resellers and portals such as Get your Guide or Viator by marketing offers that it produces itself. Leading travel portals, including Booking.com and Tripadvisor, as well as specialist providers are currently expanding in this lucrative market segment.

David Schelp, Managing Director of Majorca-based TUI Destination Experiences (formerly Destination Management), is optimistic about the opportunities for the group. The worldwide market for destination activities such as excursions and event tickets is worth about €140 billion and is expected to grow about 7% a year up to 2020.

"This is stronger growth than the travel market as a whole, because people want to experience more on holiday,” he said at a workshop at last week’s presentation of the winter 2018/19 programme.

TUI Group intends to expand this segment massively and has bought back the Destination Management business from its former subsidiary Hotelbeds. "This will enable us to expand our presence with our own branches from 23 to 48 countries," Schelp said.

The incoming services expert explained that in contrast to online portals such as Get your Guide, Rent a Guide, Viator or Expedia Local Expert, TUI is not only an intermediary through its incoming network but also produces its own offers. These exclusive destination experiences will then be marked with the sub-brands TUI Collection and TUI Plus to differentiate them from other offers.

This summer TUI customers can choose from over 10,000 different excursions. The share of differentiated products, which can only be booked exclusively with TUI Destination Experiences, amounts to 25% and will be increased in the future. One such exclusive offer this summer, for example, is an off-road trip on Menorca.

"The sights in a destination cannot be differentiated. But we can offer excursions in a different way with TUI Collection, for example by avoiding shopping stops, forming smaller groups and offering them in German for German tourists," Schelp explained. "We want to make the stay an individual experience for our guests by digitising our business and expanding and differentiating our product range. This increases the satisfaction of our customers and gives us the opportunity to continue growing."

However, TUI will also offer destination activities of other suppliers by gradually integrating portals and specialist firms in its sales channels.

In future, TUI wants to market these destination experiences to customers before their departure through its app, the ‘goTUI’ website and through travel agencies. By digitalising the offers, the tour operator also wants to make more individual and scalable. Until now, most such activities have first been offered to customers once they are already at the destination by TUI representatives such as tour guides.

According to Schelp, the TUI Destination Experiences division (including the former Hotelbeds Destination Management business) last year handled 11.5 million guests, provided 24 million hotel transfers and sold 4.6 million excursions, generating sales revenues of about €700 million. The unit has some 6,500 staff.

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