Tui chief downplays impact of new UK direct brand Sundeals

Tui’s new low-cost direct-sell Sundeals brand in the UK does not threaten sales through third-party agents or the group’s core package holidays business, group chief executive Sebastian Ebel has insisted.

 

Speaking as Tui reported results for the nine months to June, Ebel said: “We differentiate very much between Tui’s differentiated product and no-frills, low-cost, budget product. That is why we introduced Sundeals. We want dynamic product differentiated from our own product.”

 

Tui UK unveiled Sundeals last week offering flights and hotels direct to consumers, including to Spain, Greece and Turkey.

 

More: Tui hails resilient model as late-booking trend cushions profit drop

 

Ebel explained the brand had been built on the model of direct-sell subsidiary Ltur in Germany, saying: “We have a very successful direct-retail, dynamic package product in Germany. We are not so strong in dynamic packaging [in the UK]. 

 

“When we did a market survey [on dynamic packaging in the UK] we found customers did not really understand what they get.”

 

He insisted “the focus of Sundeals will be dynamic packages” and said: “We didn’t invest a lot of money [in it].”

 

Ebel insisted sales through retail agents remain vital to the group, saying: “Retail in all our markets is extremely important to us. It’s an expensive channel but it’s a great channel [for] higher margin products for us.”

 

He added: “Our main effort is on our own product – 90% on Tui, 10% on Sundeals.”

 

Asked whether Sundeals product could be made available to the trade, Ebel said: “If we would do something to bring it to the trade, we have all the links.”

 

Tui already has direct-sell brand First Choice in the UK. Asked if the launch of Sundeals threatens the continuance of First Choice, Ebel noted the brands vary. First Choice sells Tui package holidays rather than dynamic packages.

 

However, he said: “First Choice doesn’t play the role it played five years ago. The focus will be more on Sundeals.”

 

He said questions about the future of First Choice should be addressed to the UK management team.

 

Tui reported a 6% fall in revenue year on year in the three months to June, with group profits in the quarter down by 45% to €124 million and loses for the first nine months of the year hitting €112 million – up from a €69 million loss last year.

 

Booked revenue in the UK for April to June was down 8% year on year in what Tui described as a “late booking” and “challenging” market.

 

However, Ebel reported “strong momentum” in the last four weeks, with booked revenue up 7% year on year.

 

He said: “Turkey especially has been very slow. Now it’s really taking off, and Cyprus for the UK has been very difficult till five weeks ago. Now we’re back to normal.”

 

The group had reduced tour operator capacity for the summer by 5% “when we saw the risks coming, [as] we didn’t want to go into price competition”, he said.

 

Tui Group chief financial officer Mathias Kiep noted of the quarterly results: “The numbers are below 2025 but without these one-off effects they would be above, and they are above 2024.”