Tui Group chief executive Sebastian Ebel said the operator was being inspired by the likes of Netflix and Amazon Prime, insisting its focus on unique product was giving Tui a competitive advantage over its major UK rivals.
Ebel, though, sounded caution about 2025. “We very much want to grow, and that will mean that [our] Atol will grow," he said, speaking at a briefing in London. "But we are not growing for the sake of growing, we want to grow profitably.
"So I think this year, we are more cautious. Hopefully that was right. Maybe we don’t get the last 2% of growth, but maybe we are able to keep a good level [of profit] and increase profitability.”
He added: “We are cautious on the growth of fixed capacity; growth should come from the dynamic part. More and more content will come.”
He dubbed the strategy “risk right”. “It’s important the risk capacity is a sensible order of magnitude,” he said. “We are very convinced about this year. We are very convinced [about] what we do for the next years.”
Ebel explained: “What is important for us in the package model [is that] we have conservative capacity because we envisage the market would have slightly more capacity this year. So our focus is on selling the fixed capacity, not growing the fixed capacity. Growth for the future will come from the dynamic product.”
Ebel said Tui’s new partnership with Ryanair was encouraging, but added this did not mean Tui’s own airline would diminish in size. "We have grown seats," he continued. "It’s a combination of our own seats and third-party seats. Last year, we grew by five or six aircraft. This year, because we were cautious, we didn’t grow.
"The airline will grow, but it will not grow for the sake of seat-only growth. It will only grow if we sell more packages, to grow destinations with packages. We will decide when we see what the growth patterns are, where are the new destinations we want to fly to.
"We have not in the past taken all the opportunities which we had,” Ebel added, saying he would now give “more commercial freedom” to Tui’s airline.
Ebel said Tui now had an NDC agreement with British Airways, which had brought better seat rates, and would open its 500th hotel this year. The location of the property will be revealed at ITB Berlin next month.
Tui believes a growing portfolio of own-brand properties, plus cruise ships and other differentiated product, will give it the edge over rivals Jet2holidays and easyJet holidays. “We have one big advantage; we can guarantee the quality of the product," he said.
He compared Tui’s unique products with the benefits offered by Amazon Prime and exclusive Netflix series’. “That’s why people go there.”
