12 November 2018

TUI policyLOUNGE with Elke Reichart

Digitalisation and innovation are changing both society and the business world. Brand new products, services and business opportunities are emerging. The digital transformation is also transforming outdated structures and frameworks – in areas such as competition and state regulation, for instance. Elke Reichart, Chief Digital Officer at TUI Group explains what that means for a fully integrated leisure tourism business like TUI in the TUI policyLOUNGE.

Although one in two Germans still books their holiday at the travel agency, there has been an enormous increase in online holiday bookings in recent years. In Scandinavia TUI is already generating around 85 percent of its revenue online. Yet the digital transformation means more than just an additional sales channel. It has given rise to new business models, forced companies to change existing ones and redrawn the IT landscape.

The customer experience is TUI's top priority, according to Reichart, and the economies of scale associated with the digital transformation make it possible to create attractive new customised travel products and offers. Reichart also mentions the IT solutions that TUI uses to generate added value from the existing inventory by exploiting the bigger economies of scale. For example, it can offer the customer a wider range of options. She also points out that TUI is now able to expand its portfolio of excursions at the destinations as a result of its acquisition of the startup Musement.

Reichart underlines that TUI is very well positioned as a vertically integrated organisation generating over 50 percent of its profits with its own hotels and cruise ships. As a result it operates independently from the major online platforms and has a very loyal customer base.