Introduction
TUI is a leading tourism group with a big portfolio consisting of tour operators, 1,600 travel agencies, and online portals. Further, it operates five airlines with around 150 aircraft, over 400 hotels, and 16 cruise liners (About TUI Group, 2022). All these activities in the hospitality sector are integrated and coordinated under one roof. Key features of TUI’s culture that drive its services are responsibility for sustained economic, environmental, and social development. This essay will explore how components of its innovative strategy and the establishment of new capabilities have transformed the company into a high-performing firm in the hospitality business.
Key Components of TUI Innovative Strategy
The company operates an integrated business model focused on growing itself and its customers, which allows it to drive optimal returns. It is making strides towards the acquisition of digital clients through investing in a sophisticated online platform that is meant to create a big tech ecosystem (TUI Group Strategy, 2019). This strategy is accelerated by four specific initiatives that are geared toward increasing profitability in all sectors.
Protecting Strong Position in Market and Airlines
TUI has, over the years, faced many cyclical and structural challenges in its airline services. This compelled the company to consolidate its activities within the airline services in order to avoid bankruptcy (TUI Group Strategy, 2019). Further, it has improved its cost position, adopted flexibility, and incorporated centralized IT processes that are used to drive market transformation. The initiative has enabled TUI to expand its products beyond the traditional packages while maintaining its leadership status among its competitors.
Scaling up Hotels and Cruise Services
Currently, TUI has about 411 hotels that are highly profitable. This has given it a leveraged position in the distribution market, thereby driving customers to its services (TUI Group Strategy, 2019). In view of this growth, TUI intends to continue investing in the expansion and diversification of its portfolio. Its major focus will be directed towards establishing new ventures in the Caribbean, Southeast Asia, and African regions.
GDN-OTA Platform
TUI has a new travel agency platform called GDN-OTA that operates in six markets. Unlike the traditional airline market, this service is offered by outsourcing aircraft seats. Its main attractive component is the competitive prices, which lure many new customers to the firm (TUI Group Strategy, 2019). The evidence so far indicates that GDN-OTA has realized exponential growth, and it is projected to continue expanding in the future.
Vertical Integration and Digitization
TUI used the opportunity that digitalization offered to change its business model. Automation of its services gave it a competitive edge over its rivals and boosted its profitability (Buijtendijk et al., 2021). Further, it remodeled from a traditional tour entrepreneur into a fully vertically amalgamated provider of hospitality adventures. This strategy involved the merger of the parent company, TUI AG, with its subsidiary, TUI Travel (Schäfer, 2020). This changed its resource base, thus enabling it to expand its assets, such as hotels, cruise ships, and destination experiences.
How TUI Develops New Capabilities
Implementing Machine Learning System
TUI Company is now executing device learning systems for its world shared-transfer functioning platform. This development is being undertaken in partnership with Mobi Systems. This is in line with TUI’s strategy of scaling up investment in digital platform capabilities (Mallorca, 2022). In addition, it is part of its main modernization to its performances to increase productivity, standard service delivery, and preserve continuous growth. Further, the upgrade is expected to reduce carbon dioxide emissions and provide live vehicle tracking, timing, and notifications.
Using Snowflake and Cloud Tech Systems
Furthermore, the company decided to go beyond its current systems and implemented Snowflake and a variety of cloud-based technology systems. It helps the firm consolidate all its stand-alone systems into a single source of truth for information. This equally eradicated legacy solutions and assisted in cutting costs. Consequently, it offered a digital platform that has created long-term corporate change (Samuels, 2022). Additionally, Snowflake allows working with transactional and analytical data on one program, thus enabling easy sharing of information.
Conclusion
TUI is a leading tourism group with a big portfolio consisting of tour operators, 1,600 travel agencies, and leading online portals. The company operates an integrated business model focused on growing itself and its customers. It incorporates the GDN-OTA platform and vertical integration processes. This strategy is anchored on protecting its strong position in the market among airlines, hotels, and cruise services. Through these methods, TUI has been able to consolidate its services, diversify its products, and offer competitive prices that lure many customers to view it as their sole hospitality service provider. Further, TUI is leveraging technology by implementing machine learning processes for its global shared-transfer operations platform, and it has helped reduce carbon dioxide emissions and provided live vehicle tracking and timing. Finally, the Snowflake and cloud-based technology has consolidated all of TUI’s stand-alone systems into a single source and reduced operating costs.
References
About TUI Group. (2022). TUI Group. Web.
Buijtendijk, H., Heiningen, J., and Duineveld, J. (2021). The productive role of innovation in a large tourism organization (TUI). Science Direct. Web.
Schäferi, J. C. (2020). The case of TUI – Sailing into a bright future orsinking like Thomas Cook?Catolica Lisbon Business and Economics. Web.
Mallorca, P. (2022). TUI collaborates with Mobi to implement machine learning in cutting-edge digital operations platform. TUI Group. Web.
Samuels, M. (2022). TUI smiles on Snowflake to give business users timely access to business-critical data. Digimonica. Web.
TUI Group Strategy. (2019). From an integrated holiday provider to an integrated digital Tourism ecosystem. Web.