Summer in demand, winter too
TUI profits “in leaps and bounds” from FTI bankruptcy
20.06.2024, 17:10
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Germans are in the mood for vacation and are not letting the FTI insolvency spoil their vacation. On the contrary: Due to the high demand, TUI is expanding its summer offer in the short term “all over the world”. The winter season is also starting promisingly. Exotic travel destinations are primarily in demand.
The travel giant TUI has expanded its offering due to the bankruptcy of its competitor FTI and wants to increase its market share. In the past two weeks, bookings for summer trips have increased dramatically, explained Stefan Baumert, head of TUI Germany. The company quickly reacted to “the current changes in the German travel market” by adding 300,000 additional places to its program. TUI quickly concluded contracts with hotels and partners in Turkey and Egypt in particular, but also in the Balearic Islands, Canary Islands, Greece and the United Arab Emirates, in order to secure FTI quotas that became available. “We immediately fanned out to all corners of the world,” said Baumert.
FTI from Munich, number three in Germany after TUI and Dertour, filed for bankruptcy at the beginning of June. The company ran out of money because long-standing doubts about the tour operator’s future viability caused bookings to collapse. The rescue by a new owner failed. The state did not want to step in again because FTI could not repay the Corona aid it had received.
“On the one hand, the FTI insolvency is tragic and moving, but on the other hand, it is an opportunity for us to gain market share,” said Baumert. Other tour operators such as Dertour and Alltours are also trying to do this, explained the tourism manager. He did not want to give any specific figures. In addition to the approximately 300,000 additional guests in the summer, he said that another 150,000 guests will be added in the winter who would otherwise have booked with FTI.
No rising prices
With a guest count of six million in this country this year, that would be an increase of 7.5 percent for TUI. Baumert expects a stronger percentage growth effect for 2024 than for 2023, because the first months of this year have not yet been included.
The industry leader does not expect rising travel prices due to the loss of a major provider. “The market capacity will not change, it will just be distributed among other tour operators,” explained Baumert. TUI could become the new employer for some of the 11,000 employees worldwide affected by the FTI bankruptcy. “We have vacancies, they are well-trained people, that should be fine.”
Winter bookings are off to a good start
Despite inflation and rising travel prices, the market leader is expecting a strong peak season. “The holiday destinations around the Mediterranean are more popular than ever and are ensuring that we can exceed the already good booking situation from last summer,” said Baumert. Mallorca is the most popular travel destination for TUI customers, and the Spanish Canary Islands are also in demand. Protests by locals on Tenerife or Mallorca about the consequences of mass tourism, primarily the lack of affordable housing, have not deterred holidaymakers. The Turkish holiday region of Antalya is in second place for TUI, followed by Greece.
The trend from the extremely hot summer last year towards a longer season continues. For example, TUI is extending the season on Crete until the end of November. In the winter season, as in the summer, there is a strong early booking trend with double-digit booking increases, explained Baumert. Long-distance travel is now fully recovering from the onslaught of the Corona crisis. There is a trend towards exotic travel destinations in Asia, with Thailand as number one and Vietnam as the shooting star.
TUI also wants to expand its African destination region with new hotels of its own, for example in Zanzibar in the Indian Ocean off East Africa or Gambia on the Atlantic in the west. Travel prices rose by two to three percent, in line with the inflation rate. Long-haul travel was at the upper end of the range due to the increase in airfares.