TUI Group

Digital technology to conquer the Chinese market

The European market leader plans to use digital technology and partnerships to expand in the fast-growing Chinese outbound market.

May 11, 2017
Fritz Joussen spoke at ITB China this week.
Photo: Richard Lai, TTG ASIA

With global turnover of €17 billion and 20 million customers, TUI is the world’s largest tourism group and the clear market leader in Europe. But it is a much smaller player in emerging markets where local firms tend to dominate.

Under its recently launched “TUI 2022” programme, the German group wants to win an additional one million customers and generate an additional €1 billion in annual revenue within the next five years. To achieve this, TUI is seeking to gain a larger foothold and gain market share in Asia, particularly China, and South America, using in particular its well-known international brand as well as state-of-the-art digital technology to tap into new markets within these regions.

CEO Fritz Joussen used a keynote speech at the inaugural ITB China in Shanghai on Wednesday (May 10) to outline how the German group wants to expand in the fast-growing Chinese outbound market. According to official forecasts from Beijing, Chinese tourists will make 700 million overseas visits in the coming five years.

“Developing our presence in China offers enormous opportunities for us as a quality holiday brand with global reach,” Joussen told Chinese and international officials and managers. “We are seeing new travel trends, in particular among young Chinese travellers. For a long time, the focus was on city breaks, culture and shopping. Young Chinese consumers are now discovering ‘Western-style’ sun and beach holidays, sports, wellness and relaxation,” he said.

“We already take European tourists to China, while Chinese tourists are travelling to Europe with us. In future, China will be a travel hub within Asia. We are aiming to offer Chinese customers holidays in Malaysia, Thailand or Vietnam the way we are offering travel within Europe for German, French or Swedish customers,” he added.

TUI hopes to win Chinese bookings in particular for holidays in South East Asia, including its new hotels on the Maldives, in Thailand or Vietnam. “Some of our hotels are being marketed internationally, for example our first Robinson Club on the Maldives. There, the majority of guests are already today from China, Japan and Korea,” Joussen pointed out.

TUI already has a long-standing partnership with CTS, which owns the largest travel agency network in China with approximately 350 outlets. This joint venture was officially extended for a further 15 years, until 2033, as part of Joussen’s visit. TUI, with 120 employees at offices in Beijing and Shanghai, offers outbound and inbound packages.

However, Chinese travellers, often millennials, tend to be digital natives who use technology much more than their European counterparts.

“The Chinese travel market is far more digitally driven than the German market in comparison,” the TUI CEO pointed out. “In China, customers more and more use their smartphone to book their holidays. This underlines our ambition to tap into China as a potential market using our brand and digital technology and develop state of the art travel solutions with our Chinese partners.”

TUI said it sees further opportunities to position its internationally strong brand in China through co-operations such as the partnership with Alibaba subsidiary Fliggy. In addition, the group is likely to use its international portal, which already has a Spanish version, in China as well.

Apart from TUI, Thomas Cook also has ambitions to create a sizeable tour operator in China to sell outbound holidays. The European number two has created a joint venture with shareholder Fosun for this purpose.

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