Investors ‘wanted Tui broken up’

Investors wanted the Tui Group broken up when chief executive Fritz Joussen took over in 2013, he confirmed last week.

Instead, Joussen set out to transform the group from “a trading company” to an asset-operating business making most of its profits from hotels and cruises.

The Tui boss hailed the transformation since but said he would have moved faster if he had the time again.

Speaking at German travel trade show ITB in Berlin, Joussen said: “We were a very traditional business, a trading company, like a tour operator. Investors were saying the company should be broken up. When I came in, it was the preferred course of the more-activist investors. A transformation was needed.

“Our [tour operator] markets and airlines are now less than 30% of our business [profits]. We have transformed from a trading company to a business investing in, marketing and operating assets.”

He said: “Operating assets is nice where you have more demand than supply, so that is where we invest [in hotels and cruises] and there the internet is not a disrupter, it is just a sales channel.

“We operate 380 properties, mainly as assets. We run 100 million bed nights, 20 million airline seats. We have 150 aircraft and 16 cruise ships, and €5 billion of ‘risk’ with other companies. We call it a vertically integrated tourism business.”

However, Joussen said: “Maybe I was too risk averse and would move faster [now]. We kept the [local] markets separate. I maybe left them siloed too long. Now we put them all in one. Until recently we had IT and budgets organised by country.”

He added: “Five years from now, Tui will be a digital platform company maybe more than an integrated tourism company.”

Asked how Tui seeks to appeal to younger adults, Joussen said: “The sweet spot for our brand is not the young customer, it is 35-plus – and the sweet spot for growth is 65-plus. These people have the money and they travel more.”

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