Monitor de Mercados: Visión de un Key player

TUI Travel PLC The new scenario in Tourism through the eyes of the market leader

Ian Livesey Head of Specialist TUI Travel plc A&D, Spain &

Andorra

1. TUI Travel, TUI AG & TUI Travel A&D

2. The new scenario in tourism

3. The impact of the new environment for TUI Germany

4. TUI´s strategy: Differentiation by adding value

Contents

1. TUI Travel, TUI AG & TUI Travel A&D

TUI Travel, TUI AG & TUI España

TUI Travel PLC

TUI AGFirst Choice

Holidays PLC

Creation of TUI Travel plc

• Market leader in tourism on an international level

• Presence in 180 countries worldwide

• 20 outbound markets

• More than 30 million customers

• Fleet of 156 planes

• 3500 points of sale in Europe

• 48.000 employees

• 200 brands

• Turnover of 18.764 mio. € in 2007

• Results (EBITA): 419 mio. € in 2007


TUI Travel plc in numbers

Tour Operators

Aircrafts Destination

Services

Hotels

Approx. 3,500 travel

agencies

More than 200 brands

and products with 30 mio.

clients

156 aircrafts More than 20 incoming

agencies

237 hotels with

144,000 beds

Travel Agencies


TUI Travel plc in numbers

Arrival Home

Flight

Check in

Airport

Return

Airport

Check in

Flight

Arrival Journey

Excursions

Hotel

Transfer

Arrival inDestinationIn Destination

Travel Agent

Brochure

Booking

Travel Document

s

Before Holiday


Travelling with TUI – from the travel planning to the return

OUR BUSINESS

Incoming

Transport

MICE

207 M€ 800 emp

42 M€ 390 emp

31 M€ 105 emp

Costa AlmeríaCosta del Sol

Costa de la Luz

Costa BravaCosta Dorada

Costa Blanca IslasBaleares

IslasCanarias

Costa AlmeríaCosta del Sol

Costa de la Luz

Costa BravaCosta Dorada

Costa Blanca IslasBaleares

IslasCanarias

207 M€ 800 emp

42 M€ 390 emp

21 M€ 75 emp

Incoming

TRANSPORT

MICE

Our business

20 offices205 vehicles150 service points320 guides in high season2.000.000 excursions sold1.200 events organised

…nearly 5 million customers in 2008


TUI España is the Nº1 Incoming Agency in Spain

2. The new tourism environment

Spain is a mature market and a safe destination.• Expert and repeater clients

Entry of new competitors in the market• Opening of new destinations

Incorporation of new technologies in all parts of the touristic value chain.• Incorporation of low cost airlines• Increased price transparency for the customer• Increased autonomy for the customer in the organization of the trip

The New Tourist EnvironmentFactors

Changes in the customers´needs• Preference for a more differentiated product• Cost and quality as two factors for the purchase decision

Reduction of the average stay• More trips, shorter stays and less average spending

Financial and economic crisis worldwide• Climate of mistrust• Increase of fuel prices

Lack of talent in the labour market.


WELL INFORMED customers


SATISFIED customers

But FEW SURPRISED


A CHANGE…

FROM A SELLERS MARKET…

TO A BUYERS MARKET

3. The impact of the new environmentfor the touroperator TUI Germany

Volume market, quality-orientated

Premium Market

Volume market, attractive pricelevel

Last-minute market, direct sales

Specialist market (roundtrips)

Main brand with

highest volume

TUI Germany covers all market segmentswith its differents brands

Market volume

Low High

PriceEconomic Quality Exclusive

Medium

Principal market of TUI

In the past, the intermediate segmentrepresented the most important volume of the market

Low High

Price

Price-orientated segment

Specialist segment

Market volume

Medium

Collapse of the intermediate segment

Principal market of TUI

In the new environment, the market is undergoing a polarization

Individualization

- Tomorrow -

“Cluster“

- Today -

Mass Demand

- Yesterday -

The demand is getting more and more individualised

Some brands have already adapted their strategy successfully

Differentiation is the key.

Standard products no longer fulfillthe new market requirements

4. The strategy of TUI: Differentiation by adding value

Strategic approaches:• “Multichannel approach” with special importance of the internet• Specialisation: “Target groups”• Own and exclusive products• Fidelization of the customers by a complete offer, including services with added value

The strategy of TUI is based on four pillars

Travel Agencies Internet Callcenter

TUI Leisure Travel980 franchise agencies440 branch agencies

TUI Interactivewww.tui.comwww.tui-hotels.comwww.1-2-fly.comwww.discount-travel.com...

TUI 4 UCallcenter in Bremen, Germany

Multichannel distribution:The distribution of TUI is based on three channels

Different product lines with TUI brand,

classic holiday package and modular products (components)

Classic touristic package holiday,

TUI brochures for different destinations

yesterday today

Differentiation by target groups:from a mass-market product to an individualised product

TUI Schöne FerienClassic package holiday and hotel only

TUI PremiumExclusive segment(luxury -> airtours)

TUI Schöne Ferien FamilyFamilies

TUI Schöne FerienClubsClub hotels for families and couples

Differentiacion by target groups:different product lines for different target groups

• Target group: medium-age couples• Hotels with reduced volume (max. 250 rooms), always situated in seafront• 4 – 5 stars• “Comfort & Convenience”• Personalized and individualized service• 100% orientated to the needs of the German market• Reservations exclusively via TUI• As of summer 2009, the first 3 hotels in Greece and Turkey

Own exclusive products:The brand Sensimar Hotels was launched in summer 2009

“You are not flying with a

plane. You fly with us.

Welcome on board.”

Promotional campaign

highlighting the service level

Differentiation of services by adding value:Quality campaign of TUIfly in January 2008

Assistance by German-speaking reps in all destinations, 24/7 service telephone

System for complaints handing in the destination, if the complaint cannot be settled -> compensation directly in the destination

Publication of guest satisfaction with hotel according to CSQ in the brochure (hotel in general, service, facilities, food)

“Zug zum Flug” (train to the plane) all holiday packages include a first class train ticket to the departure airport (and return)

Differentiation of services by adding value:Examples for additional services for TUI customers

Slogan: “Holidays with TUI – you deserve it.”

Message: TUI treats all customers like VIPs.

Differentiation of services by adding value:Promotional campaign with German national team coach

Reflexiones...The future…

Flight

Distribution

Tour Operator

Hotels

Dest. services

Demand

Previously:The distribution and the tour operators

were the growth drivers.

Previous model

In the future:All parts of the touristic value chain will

become growth drivers.

Distribution

Tour Operator

FlightDestination

services Hotels

Demand

New model

In the new touristic model:the main growth potential are the product areas

Thank you for your attention

Monitor de Mercados: Visión de un Key player

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