Austria
Behind you lies your first financial year as CEO. Is TUI back on course?
Definitely, yes. 19 million customers travelled with TUI in financial year 2023. That is 13 per cent more than last year. We had a strong Summer and bookings have held up their healthy momentum into the early weeks of Winter 2023/24. We are working at a profit again; we have paid back the state loans. This has enabled us to invest in our own growth once more. And I am looking towards the new financial year with confidence. The economy may be under a few clouds, but people attach high priority to their holidays. We have a clear growth strategy. We are improving our market position in our traditional markets. We also want to offer new products to our regulars while winning over new customers in general.
What opportunities do you see for TUI’s classical operations in Markets & Airlines?
Our tour operators are growing profitably. In Germany we have acquired market share and in countries like France and the Netherlands we are on a robust track as well. In markets where the competition is tougher, like UK & I, we are walking taller all the time. We hope to score some points there and offer our customers a pleasant surprise. Some markets are causing us particular pleasure. One is Poland, where we notched up a million customers last year for the first time. Our Polish colleagues have now launched operations in the Czech Republic too.
How is TUI responding to new customer expectations?
There can only be one objective for us, which is to surpass our customers’ hopes. That is what we always set out to do and we are succeeding more and more, not least thanks to some new business models. First Choice, our second brand in the UK, targets young people in particular. We are restructuring First Choice as a web- and app-based platform where our customers can piece together their own holidays. Or take our spectrum of tours in Belgium. With TUI Tours customers can select a flexible route and then adapt it at the click of a mouse or combine it with flights, hotels and experiences. A third example are the accommodation-only bookings. After a successful launch of that concept in Sweden, we have extended it to other markets. These examples illustrate our innovative spirit. We dare to try out new ideas. That is an incredible advantage and it says a lot about how we learn from each other and spur each other on.
How do you rate the prospects, especially in the hotels business, for the Holiday Experiences that now constitute your second-biggest field of operations?
Our hotels and resorts have turned in excellent results now for six quarters in succession. We still expect strong growth potential there. What is important is to secure long-term growth with a light approach to capex investment. We are aided by new funding models like the Hotel Fund which we have created along with partners. This year the Fund completed its first transactions. TUI BLUE is also heading for growth with five new hotels in Africa and Asia this summer, and seven more on the cards for 2024. Taken as a whole, our strong portfolio with altogether 12 hotel brands – for the price-conscious customer right through to the luxury holiday-maker – is generating growth via management and franchise contracts.
Cruises were expected to recover rather more slowly after the pandemic …
… but then returned to normal very quickly. The segment had another strong year for the first time since the outbreak of the pandemic. The Mein Schiff fleet operated by TUI Cruises began 2023 by breaking its bookings record. Some voyages were booked up within days. Further growth is already certain, with three vessels joining TUI Cruises straight out of the shipyard in the next three years. They will set new standards in terms of comfort and environmental protection. This underscores our ambition to run one of the most cutting-edge, climate- friendly cruise fleets in the world.
And how is Musement getting along?
Our profitable growth continues with experiences and activities. Last year we reached out to a million new customers and arranged more than seven million experiences, from hiking trips and sporting activities to theme park visits. We are focusing increasingly on exclusive content of our own, boosting sales through partnerships. TUI Musement is designed to be a personal guide and concierge for our customers all year round, not only during their summer holiday.
That means you want to offer additional services to TUI’s customers?
Correct. The core of that is the Central Customer Ecosystem, which enables us to make new, more personalised suggestions. The idea is to sell new products to existing customers but also to gain new customers. I don’t think there is any other company in the world that has anything like as many different customer contacts in the travel market as we do – not just online, but face-to-face in the retail shops, in our hotels, on our aircraft and liners, and during experiences. We will be tapping even more deeply into that potential and building on our sustainability.
You mentioned sustainability. How is TUI shaping the future in that respect?
For a start, any travel company that ignores climate change and does not adopt a sustainable view is undermining its own business model and placing a heavy burden on future generations. We take a different approach. In January 2023 we published our new Sustainability Agenda – it’s ambitious. By 2030 we will reduce CO2 e emissions per air passenger by nearly a quarter. In the Cruises segment we will cut absolute emissions by almost 28 per cent, in our hotels by at least 46 per cent. The emission reduction targets set out in our Agenda were evaluated and verified independently by the Science Based Targets initiative. Our cruise companies are the first in the world to adopt a reduction target that has been scientifically validated, just like TUI Airlines among leisure flight operators. By 2050 at the latest TUI will be a net zero emissions company. We bear this target in mind every single day and every day we change a little more to draw us closer to that goal. Our internal targets are, of course, even more ambitious. I have to say, nevertheless, that politicians cannot keep piling new strains on us.
What do you mean exactly?
Travel has been brandmarked by some politicians. Flying is demonised, cruising too. Holiday-makers are bombarded with excessive rules and prohibitions. The package holiday – which is without a doubt the safest way to travel – is deliberately priced up by statutory obligations, while non-European groups are largely free to sell their unregulated products, which are not very consumer-friendly. Besides, the government doesn’t do its homework: rail does not provide a punctual feeder service – we have to pay compensation for the delays. And the same can often be said of flights, as air traffic control in Europe has still not been standardised, which would consistently permit routes and procedures to be as climate-friendly as possible. Carbon emissions in European air space would, at a guess, be five to ten per cent lower if that could be achieved. There is simply not enough being done! At the same time, the fact that we have been investing massively for a long time in technologies to protect the environment is often ignored.
What specific environment measures are underway?
Over time the airlines will be using substantially larger quantities of sustainable aviation fuel, or SAF. In fact, we intend to exceed the statutory blending requirements, even if these biofuel blends currently cost three to five times as much. Apart from that, we are optimising flight routes and renewing our fleet. A lot is happening with our cruise liners too. In May Mein Schiff 4 drew on green shore power for the first time at the port in Hamburg. Two months later the vessel set off for the Nordics with its first sustainable biofuel. The principal basis for that is left-over cooking oil, which cuts carbon emissions by 90 per cent. Mein Schiff 7, which will put to sea next summer, will eventually run on green methanol, making her almost carbon-neutral. And we will operate the other two newbuilds on low-emission liquid gas. Our hotels are also playing a pioneering role. Robinson Club in Italy, for example, boasts one of the biggest hotel photovoltaic systems in Europe. And since November 2023 TUI BLUE Montafon has been our first hotel to cut its carbon emissions to zero. So we are slashing emissions hugely with our holidays. We also encourage travel formats that entail lower emissions and we are considerably expanding our rail services, like the TUI Ski Express that we launched last winter to take Dutch and German customers to Austria.
Apart from the environmental aspects, to what extent can tourism drive economic and social development in destination countries?
The travel sector provides education and career prospects for people in the destinations and it enhances environmental and social standards. We want to step up these positive impacts. In early June we signed a major Memorandum of Understanding with the government of Cabo Verde. The core idea: further development of the huge tourist potential in the Cape Verde islands with a deliberate focus on strengthening local value chains, promoting environmental protection and driving partnerships for innovation. The independent TUI Care Foundation set up by our company is very active on this front. For one thing, it works to ensure that young people in the destinations, in particular, can benefit from better prospects for the future. We want to enable them to participate even more in successful tourism. Our industry is opening up entirely new opportunities, especially in emerging economies and developing countries. But we should not underestimate the need in our European source markets either. Young people are our future. We must accompany and support them.
You need to demonstrate opportunities to your own employees as well. How is that going?
TUI’s success stands and falls with our people. Their expertise and commitment is of superlative importance. That applies every day and for that I extend the warmest thanks to all our employees all over the world. But their professionalism is all the more striking in difficult situations. I am thinking in particular of those weeks in July, when more than 300 service staff put in such a magnificent effort during local forest fires on Rhodes and in round-the-clock crisis teams. In the conversations I held with people in the field, I experienced a huge sense of responsibility, and it moved me. Another genuine highlight is the new TUI Campus in Hanover. It has become a place for exchange and dialogue, not only between our employees but also with customers from all over the world. It is a similar story in our other offices, whether Rijswijk in the Netherlands, Luton or Stockholm, all places where we are fostering a new Way of Working. But I think the most motivating thing of all is that we help people to enjoy the most wonderful moments of their year. We contribute to people experiencing the world and getting to know other cultures. That often gives them a more differentiated picture of distant lands and cultures. I firmly believe that no other sector can do this as well as tourism – and given the situation in the world today, that is more important than ever.
Last of all a look ahead. What do you see?
Tourism and TUI have huge potential. We have triggered plenty of initiatives over the last twelve months. Now we are seeing the commercial payback, the profitable growth. Of course there will be geopolitical conflict and crisis in future too. We have to live with such things. We will work hard at our success without getting too big for our boots, and we will always keep our eyes on our objective: to offer our customers unique holidays and experiences. That is what TUI is all about – today and tomorrow!
