Between flagships and speedboats

At TUI Germany, Sebastian Ebel is pulling back a bit from the ideas of ex-board colleague Johann Lundgren about a wide-ranging centralisation of the tour operator business. Like at the competitors, things have to go faster and be leaner. And that’s necessary. TUI and Thomas Cook have lost market shares. Schauinsland, Alltours, FTI and dynamic tour operators are growing, cruise firms and hotel portals like Booking.com are eating into the package holiday cake.

The ‘margin before volume’ mantra held back the groups. TUI and Thomas Cook still have to earn more in Germany but they won’t achieve that only with cost reductions. Now is the time for growth. While TUI is expanding the hotel portfolio again, new Germany chief Stefanie Berk is implementing the European platform model at Thomas Cook.

So is that exactly the opposite course to Hanover? Only at first glance. TUI is already on a European path in many areas such as joint contracting, hotel development and introduction of the main TUI brand. But too much centralisation impacts on speed. After the departure of ‘digital prophet’ Harriet Green, Thomas Cook CEO Peter Fankhauser needs his own story, and it’s called profit growth through platforms and leaner processes. Berk is intelligently keeping product and flight management in her local market. After all, competitors score with speed and sales service.

DER Touristik looks like the opposite model. CEO Sören Hartmann emphasises national responsibilities, and central hotel procurement and European products are a horror to him. Not only his experiences at TUI but also the very different products play a role there. Moreover, he doesn’t have any power-brand like TUI and Thomas Cook, and the portfolio of own hotels has plenty of room for growth.

Nevertheless, Hartmann is relying on platforms for IT and destination management as well in order to achieve synergies with the acquired Kuoni tour operators and to increase their currently very low profits. Despite all the independence, the markets will grow together here as well.

One thing unites all three groups. They want to grow more strongly in Germany – TUI even to a high 25% market share. Competitors are already complaining about aggressive prices from Oberursel. It will be a hot dance in a stagnating market with flight over-capacity.