Inside Tui's evolution: 'It's an acceleration of where we've been going'

His promotion to UK and Ireland chief came as Tui Group outlined its ambitions to build a “global curated leisure marketplace” – a slice of management speak that needs some deciphering.

Fortunately, Swanson has already got to grips with the jargon and stresses it is not a revolution, “more an acceleration of where we’ve been going”. “What we’re looking to have is the range and flexibility of an OTA with the quality of what Tui is all about,” he told TTG.

“We’ll always be Tui at the absolute core, but we’ll supplement this with the dynamic piece around the outside, and back it up with all of the service.”

OTAs can be unlimited in their geographical reach, and Tui has worldwide ambitions with its Markets and Airlines division. This, Swanson explains, is a key component of the “global marketplace” concept.

The biggest element is an approach to sales from Tui AG that widens geographical boundaries and extends what it offers in existing markets, including the UK.

“Principally, Tui UK is a package holiday retailer, so we will be very focused on that,” Swanson insists. “But we’ll have lots of other products in that marketplace, things you know and love – ski and cruise, which is massive for us, plus river cruise, tours and things like that.

“We’ll be doing more on areas like cities, and there is a big opportunity for us to do more accommodation-only and experiences. What we want to do is cross-sell all these products across the customer base.”

This means more dynamic packaging, including around Tui-branded hotels, expanding attractions and excursions app Tui Musement, and increasing the number of non-Tui Airways flights.

Tui has already made a start on the latter in the UK. “Last year, we did 700,000 passengers on dynamic packages with third- party flying with easyJet, British Airways, Vueling and others, and we’ve announced we will be launching with Ryanair hopefully before Christmas,” Swanson says.

Flexible flying

Placing your flying in the control of others carries risks, and Tui contact centre staff have now been trained to deal with issues arising from the use of third-party airlines, such as rebooking in the event of a delay or cancellation.

“There is a real opportunity in growing the dynamic business, but it has got to reflect well on the Tui brand,” Swanson concedes, admitting the advantages are too good to miss.

“The benefits for us are that we will have 24 UK and Ireland airports for summer 2025, which gives us brilliant coverage compared with our competitors, and 18 routes where we fly every single day. We have 86 destinations in 35 countries.”

He has a point, with Tui effectively now able to operate from twice the number of airports as biggest UK rival Jet2holidays.

Partnering with Ryanair will also bring more city break options. Swanson reveals Tui UK currently sells around 50,000 city breaks a year, up by 22% year-on-year.

“It’s not massive, but we see a big growth opportunity,” he says, adding there is also “massive growth” in demand for shorter durations of up to eight nights, which is enabled by the move to flexible flying.

Sky’s the limit?

The second element of Tui’s shake-up is moving Tui’s airlines, including that in the UK, “from a cost centre to a profit centre”. “How can we make more money out of the airline while still making sure we are supporting the tour operator and everything in it?” Swanson ponders.

Cryptically, he adds this means doing more “around the edges” of what the carrier currently does. To this end, a new chief commercial officer, Peter Glade (right), will sit on the Tui airline board. Glade joined on 1 November from SunExpress, the Lufthansa-Turkish Airlines joint venture budget carrier, where he held an identical role. His experience of both cultures and the low-cost airline sector will benefit Tui.

Then there is Tui’s new Expansion Businesses unit. “Some of the smaller businesses that are growing really fast we take out and we incubate and allow them to grow properly instead of killing them off, which is what large businesses tend to do,” Swanson explains.