TUI experiences significant financial gains due to FTI's bankruptcy.
Vacation-loving Germans aren't letting the insolvency of FTI dampen their spirits. Unexpectedly, TUI is increasing its summer destinations in "all gentleman's havens," grabbing the opportunity left by FTI's bankruptcy. The winter season is rolling in favorably, and exotic getaways are in high demand.
TUI, the tourism giant, is aggressively expanding its businesses following FTI's collapse and aiming to secure a larger market share. In the past fortnight, vacation bookings have soared, according to Stefan Baumert, CEO of TUI Germany. The company capitalized on the realignment happening in the German travel industry and added an extra 300,000 spots to their programs. They've quickly secured lodging contracts in Turkey, Egypt, the Balearic and Canary Islands, Greece, and the Arab Emirates, storming the market in these locations. "We've seen a surge in all gentleman's countries," declared Baumert.
FTI, based in Munich and the third-largest travel agency in Germany after TUI and Dertour, declared bankruptcy at the start of June. The company depleted its funds after lingering doubts over its travel agent's survivability. The takeover rescue fizzled out. Looking the other way, the state decided not to intervene again since FTI was unable to repay the Corona aid.
"The FTI collapse is regrettable yet offers an opportunity for us to bolster our presence in the market," explained Baumert. Competitors like Dertour and Alltours are also jostling for market growth, according to the tourism head. He refrained from providing specific numbers. Apart from the additional 300,000 summer guests, Baumert foresees another 150,000 guests during the winter who would have booked with FTI.
No price surges
Boasting a customer base of six million in the country this year, this growth would amount to a 7.5% boost for TUI. Baumert anticipates a more significant growth impact in 2024, as the early months of that year are yet to be factored in.
The market leader doesn't believe the absence of a large provider will trigger price hikes. "The market's capacity remains the same; it merely divides among other service providers," assured Baumert. TUI may potentially absorb some of FTI's 11,000 worldwide employees into its workforce. "We have job openings, so it should fit," Baumert added.
Strong winter bookings
Despite escalating inflation and traveling costs, the market leader envisions a robust winter season. "The Mediterranean vacation spots are more popular than ever, and we expect to surpass the robust booking situation from the previous summer," said Baumert. Mallorca leads the list of TUI customers' preferred destinations, while the Spanish Canary Islands aren't far behind. Local protests against mass tourism on Tenerife and Mallorca have not deterred travelers. Antalya, Turkey, holds the second spot for TUI.
The trend of last year's scorching summer extending the season continues. Thus, TUI extends its presence on Crete until the end of November. For the winter, there's a strong booking rush ahead, with a double-digit increase, as Baumert explained. The travel industry is steadily recovering from the COVID-19 crisis slump. A preference for exotic destinations in Asia, with Thailand at the helm and Vietnam rising as a star, is discernible.
TUI also plans to expand its African target region with new hotels in locations like Zanzibar in the Indian Ocean and Gambia along the Atlantic. Travels will see a 2-3% price increase in line with inflation. The rise can be attributed to increased airfare costs.
Read also:
- With the financial gains from FTI's bankruptcy, TUI is planning to increase its presence in exotic destinations like Vietnam and Thailand, offering long-distance travel options for vacationers.
- In light of FTI's collapse, TUI is considering hiring some of their 11,000 global employees to fill job openings within the company, contributing to the tourism industry's workforce.
- Despite the rise in inflation and traveling costs, TUI anticipates strong winter bookings, particularly for Mediterranean destinations like Mallorca and the Spanish Canary Islands, as well as Asian favorites such as Thailand and Vietnam.
