The TUI Group is planning to continue to grow with customised services and offers of leisure activitites at the holiday destinations. This will also include services for cruise ships in the ports.
With the acquisition of the “Destination Management” business from Hotelbeds, under the umbrella of the TUI Group the leading provider of destination services worldwide is being created. As a result of the acquisition TUI is thus extending its global presence and the product portfolio of its Spanish subsidiary TUI Destnation Services.
TUI itself is active at more than 100 destinations all over the world. Following the takeover, the Spanish subsidiary TUI Destination Services will be present with branches and staff in 48 countries, will employ over 9,000 people and generate sales of 700 milllion euros. The Enterprise Value will be 110 million euros against cash. TUI also expects to achieve operational synergies.
The global market for services at holiday destinations, as already offered by TUI Destination Services today, is estimated at around 140 billion euros and it offers considerable further potential for TUI. It is currently growing at around seven percent year on year. At the same time, with up to 350,000 micro-suppliers, this market segment is extremely fragmented on the supplier side and only to a small extent digitised. Already today, TUI Destination Services develops and arranges around 4.5 million excursions per year. This puts the TUI subsidiary among the top 5 providers in this business field worldwide. TUI Destination Services is already today far more than an intermediary. The Spanish company develops excursion programmes and services at the resort, organizes and accompanies them with its own staff. Thus, the company has a considerable influence on the diversity, exclusivity and quality of its offers.
TUI CEO Fritz Joussen explains: “The global market for these services is growing. Four factors put TUI in an extremely good starting position: our strong international brand, the trust of 20 million customers, the trust of the destination countries through decades of presence and, most importantly, our world-class IT and CRM systems, in which we have invested in recent years”. TUI particularly wants to make better use of the average of four months between travel booking and travel start, in order to offer customers individually relevant offers for their stay at the holiday destination. “The TUI brand guarantees the usual premium service, TUI quality and TUI comfort despite the multitude and complexity of leisure offers and providers at the holiday destination. Our IT and CRM systems guarantee that our guests will only receive offers that are relevant to them. And they get them directly from us, not from third parties. Advice, booking, flight, hotel and leisure activities at the resort come from a single source. The customer has one contact person, that is TUI”, said Joussen.
The “Destination Management” Division of the Hotelbeds Group is currently active with 2,600 employees in 25 countries, including Italy, Croatia, Mauritius, South Africa, Australia, Canada and many Asian countries. In addition to excursions and transfers, tours and activities such as Segway tours, the division also offers the handling for cruise companies in the ports. This is also interesting for TUI. Because in many countries activities while in port for the three cruise companies – TUI Cruises, Hapag Lloyd Cruises and Marella Cruises – services can be handled by our own company. TUI thus becomes a supplier rather than a customer. “The acquisition will thus bring commercial synergies to the Group’s cruise line business”, said Joussen.
In addition to the hotel and cruise business, TUI Destination Services is one of the Group’s three growth areas and has been reported separately in financial reporting under the Holiday Experiences segment since the first quarter of financial year 2018. The subsidiary company is managed by a management team led by David Schelp (Managing Director) and currently employs 6,500 people in 23 countries. It is headquartered in an innovation park in the Balearic capital of Palma de Mallorca and has two regional offices in Athens / Greece and Miami / USA.
About Destination Management
The Destination Management division of Hotelbeds Group works across more than 150 offices globally; it includes three leading global brands, Destination Services, Intercruises and Pacific World.
Destination Services is the leading B2B provider of incoming services to tour operators globally. The company offers tours, transfers and other in-destination services to its tour operator partners in over 70 countries worldwide and handles around 2.2 million passengers per year. Destination Services has a strong footprint across all regions with four large hubs in EU & Med, Americas, Indian & Indian Ocean, and APAC.
Intercruises is a global ground handling and port agency business specializing in the cruise sector, offering services in around 60 countries covering over 400 ports. Every year Intercruises handles more than 12,000 port calls, providing services to millions of passengers on behalf of its cruise partners.
Pacific World is a leading meetings, incentives, conferences and events (MICE) company operating in over 30 countries in Asia, Europe, the Middle East, Africa and the Americas. Founded in 1980 in Hong Kong, the company handles around 1,300 events per year globally.
About TUI Group
TUI Group is the world’s number one integrated tourism group operating in around 180 destinations worldwide. The company is domiciled in Germany. The TUI Group’s share is listed in the FTSE 100 index, the leading index of the London Stock Exchange and in the German open market. In financial year 2017, the TUI Group recorded turnover of €18.5bn and an operating result of €1.121bn. The Group employs 67,000 people in more than 100 countries. TUI offers its more than 20 million customers comprehensive services from a single source. It covers the entire tourism value chain under one roof. This comprises around 330 Group-owned hotels and resorts with premium brands such as RIU and Robinson and a fleet of cruise ships ranging from the MS Europa and MS Europa 2 luxury class vessels to the “Mein Schiff” fleet of TUI Cruises and the vessels of Marella Cruises in the UK. Furthermore, TUI features leading tour operator brands, 1,600 travel agencies in Europe and five European tour operator airlines with around 150 modern medium and long-haul aircraft. Global responsibility for sustainable economic, ecological and social activity is a key feature of our corporate culture. TUI Care Foundation supports the positive impacts of tourism. It initiates projects creating opportunities for the next generation and contributing to a positive development of the holiday destinations.