tui business startegy analysis
TRANSCRIPT
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 world’s 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-à-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
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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.
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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 TUI’s
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.
.
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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.
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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 Low
High
Market Growth rate
Low
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.
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Stars Question Marks
Cash Cows Dogs
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 world’s 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 Company’s 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.
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Strategic options of TUI as ‘Star’ are,
o Strategic options for stars include.o Integration – forward, backward and horizontalo Market penetrationo Market developmento Product developmento Joint ventures
Ansoff's product / market matrixIntroduction
The Ansoff Growth matrix is a tool that helps businesses decides their product and market growth strategy.
Ansoff’s 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
New Markets
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:
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Market Penetration Product Development
Market Development Diversification
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 company’s 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. TUI’s aim is for TUI Russia & CIS to achieve a market-
leading 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. TUI’s 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.
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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 company’s 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 Europe’s 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
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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 company’s 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. Expedia’s 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.
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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 industry’s previous strength during the next five
years. Indeed, at times during the 2007-2011 period, demand for hotel rooms on a global basis is
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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-and-
spoke 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.
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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
company’s margins.
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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
Travel’s 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 company’s recommendations.
The economic factor
o It became clear in 2008 that the world’s 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.
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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 government’s 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
TUI’s 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
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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
Porter’s 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
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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.
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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 Travel’s
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
TUI Travel’s 2008 Annual Report & Accounts contains an extended section on sustainability in
line with the new requirements of the Operating and Financial Review (OFR).
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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 company’s 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
Coordinators are working with purchasers across the Group to advance this work (see
Destinations page for details).
Stakeholders in destinations
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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 & Ireland’s 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 industry’s climate change
challenge to 90 Ministers of Tourism at the World Travel Market in November 2007
TUI Travel’s 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 Travel’s 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
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’
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Associations (ECTAA). TUI Travel’s 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 &
Ireland’s 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
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 Travel’s nominated charity, the Family Holiday Association.
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