Group Strategy

BECOMING A GROWING, SCALABLE AND GLOBAL TOURISM BUSINESS WITH AMBITIOUS PROFITABILITY TARGETS BY UNLOCKING SIGNIFICANT VALUE THROUGH THE ROLL OUT OF THE GLOBAL CUSTOMER PLATTFORM AND THUS CAPTURING THE CUSTOMER LIFETIME VALUE

TUI’s strategy is defined across both our Holiday Experiences and Markets & Airlines business divisions. It is embedded onto one central customer ecosystem, underpinned by our Sustainability Agenda and by our people and is focused on rolling out the global platform capturing the Customer Lifetime Value. Our Holiday Experiences (Hotels & Resorts, Cruises, TUI Musement) strategy focusses on asset-right, profitable growth in differentiated content and expanding the customer base with multi-channel distribution, in particular outside Markets & Airlines. In Hotels & Resorts, product growth is delivered by expanding our portfolio in new and existing destinations. Product growth in Cruises is driven by investment into new-build ships by our TUI Cruises JV, with three new ships being delivered over the next three years. In addition, we are continuing Marella’s fleet upgrade, by replacing older ships with newer, larger ones, which included the launch of Marella Voyager in June 2023 (previously Mein Schiff Herz). In TUI Musement, we have realigned our strategy to digitalise all three business segments (experiences, transfers and tours), with a strong focus on delivering profitable growth from the marketing of our own products across all channels and investing in particular in more of our own differentiated products.

Our Markets & Airlines strategy focusses on strengthening and leveraging our capabilities (including brand and distribution increasingly via the App, differentiated and exclusive product, quality and service) and market positions, with growth delivered from new products and new customers, based on scalable common platforms. Product growth is based on an expanded offer of accommodation only, flight only, car rentals, ancillaries and tours, as well as increasing the volume and proportion of dynamic packaging and supply, to deliver choice, flexibility and hence growth, without increasing risk capacity. Customer growth is driven by this increase in choice and flexibility, as we enlarge our appeal across more customer segments, supported by our brand and marketing strategy.

FY24 Guidance1 – We are focused on operational excellence and execution. Our strategic roadmap, the strong operational recovery and the measures taken to strengthen our balance sheet, lay the foundations for future profitable growth. Our Guidance for FY24 is provided within the framework of the current macroeconomic as well as geopolitical uncertainties especially in the Middle East. It is based on the current positive booking momentum across both seasons, albeit with Summer at an early stage, as well as a return to a normal hedging policy. Against this background, we can provide the following guidance for FY24:

  • We expect Revenue to increase by at least 10% year-on-year
  • We expect underlying EBIT to increase by at least 25% year-on-year

Mid-Term Ambitions1 – We have a clear strategy to accelerate profitable growth by increasing the customer lifetime value, creating a business which is more agile, more cost-efficient and achieving a higher speed to market with the aim to create additional shareholder value. Our mid-term ambitions are as follows:

  • Generate underlying EBIT growth of c. 7-10% CAGR
  • Target net leverage2 strongly below 1.0x
  • Return to a credit rating territory in line with our pre-pandemic rating BB/Ba (S&P/Moody’s)

Sustainability as opportunity

For TUI Group, sustainability covering all three areas of economic, environmental and social sustainability is a fundamental management principle and a cornerstone of our strategy for continually enhancing the value of our company. We firmly believe that sustainable development is critical to long-term economic success. Together with our many partners around the world, we are actively committed to shaping a more sustainable future for tourism.

We already operate some of the most efficient aircraft and cruise ships. Our commitment is to be industry-leading in achieving net-zero emissions and we aim to achieve this target across our operations and supply chain by 2050 at the latest.

TUI has committed to the Science Based Targets initiative (SBTi) to reduce emissions in line with the latest climate science by 2030 for airlines, cruises and hotels. The independent organisation has now checked and validated our reduction targets. It confirmed that they are in line with the latest climate science. Our targets are: 

  • Reduction of airline CO2e per revenue passenger kilometer by 24% by 20303
  • Reduction of absolute CO2e from our own cruise operations by 27.5% by 20303
  • Reduction of absolute CO2e from TUI Hotels & Resorts own operations by 46.2% by 20304

1 Based on constant currency and within the framework of the macroeconomic and geopolitical uncertainties currently known, including developments in the Middle East

2 Net Leverage defined as net debt (Financial debt plus lease liabilities less cash & cash equivalents & less short-term interest bearing investments) divided by Underlying EBITDA

3 Baseline 2019. Level of ambition well below 2oC. CO2e = CO2 equivalents. Apart from carbon dioxide (CO2), they include the other five greenhouse gases impacting the climate as listed in the Kyoto Protocol: methane (CH4), nitrous oxide (N2O), hydro-fluorocarbons (HFCs), perfluorocarbons (PFCs) and Sulphur hexafluoride (SF6)

4 Baseline 2019. Level of ambition 1.5oC