Travel market – strong fundamentals, changing dynamics
Tourism is growing across many regions and products – however the dynamics of growth have evolved. Global travel demand is growing well, especially outside Europe2. Relevant players are leaning towards more own brands and differentiated products with the objective of driving customer retention and loyalty. At the same time, Artificial Intelligence and Large Language Models (AI/LLMs) are developing fast with potential for new innovations for travel – especially search and book.
We regard TUI as well positioned across these trends as a strong supplier of branded products (e.g. Riu and Robinson). We also offer a large proportion of differentiated products and services. This makes AI an opportunity for us– as we are protected on distribution with differentiated products. To take advantage of this opportunity, we are incorporating the use of AI into our business to drive value3. Our vertically integrated model further strengthens this positioning as our Markets + Airline business channels demand into our differentiated products and brands to enhance our profitability potential. This helps us deliver consistent results for our shareholders.
However, to stay ahead and secure future growth, we must continue our transformation and focus on our unique vertically integrated business model with a clear focus on differentiated content. We need to strengthen marketing with a special focus on digital marketing and social media, customer retention and loyalty while building trust through safety, protection and seamless service across the journey. We intend to also increase profitability in Markets and Airlines via platforming, global growth and airline commercialisation. By doing this, TUI is well positioned to be a global leader in an attractive market growing faster than GDP4.
Focus on vertical integration – TUI’s framework strategy
TUI continues to focus on delivering its vertical integration strategy. This forms the foundation of our long-term competitiveness and a structural advantage in the travel industry. TUI combines direct customer access with own and partner supply across product verticals (Airlines, Hotels & Resorts, Cruises, and Experiences).
Stronger products drive greater differentiation and a more distinct strategic position. This model enables us offers across the complete journey and our customers benefit from greater consistent quality, while for TUI this should drive higher returns, stronger conversion, and deeper loyalty as customers remain within the TUI ecosystem.
Aligning our businesses more closely where it creates clear value and leveraging synergies across the Group, optimising capacity and networks, and connecting products through our platforms, means we should be able to capture economies of scale and strengthen differentiation.
TUI’s strategy for profitable growth
To drive our overall group strategy of vertical integration, TUI will focus on seven key strategic initiatives detailed below.
(1) Building a Scalable Global Curated Leisure Marketplace in markets
We are transforming our core tour operating business with a new operating model with the objective of enhancing efficiency and strengthening profitability. We intend to leverage multi-channel distribution, with a focus on app-first personalisation, as the main digital channel to complement retail. Scalable, dynamic flight and accommodation sourcing is a key enabler of risk-right growth. At the same time, we intend to grow our share of own products, which have demonstrated superior quality and higher margins. Our Expansion Businesses unit is driving new growth by capturing value from emerging product categories (e.g. River Cruises) and entering new markets – most recently Romania, with more to follow. Our One Platform approach (combining platforms across sourcing, production and sales) targets more global growth and distribution while leveraging our Central Customer Ecosystem.
(2) Creating a commercially independent Airline
Our Airline remains a cornerstone of TUI’s success. To position ourselves strongly for the future, we are refining the way we work together by allowing the Airline greater commercial independence, while carefully preserving the synergies with the tour operator. With our “One TUI Airline” approach, we are bringing all our airlines under one leadership team, aligning both Operations and Commercial. We expect this will allow us to strengthen profitability, focus our capacity on the most attractive routes, and defend our key strategic clusters.
(3) Global differentiated product growth in our Holiday Experiences business
In Holiday Experiences, we can build on a strong global set-up to drive significant differentiated product and profit growth.
In Hotels & Resorts we continue to expand our portfolio through our proven asset-right approach. We have 463 hotels5 and a pipeline of more than 706 hotels, strengthening our presence in both established and emerging destinations. We grow in ownership, through our joint ventures, the TUI Global Hotel Fund as well as management and franchise contracts. We leverage our vertically integrated model, by jointly developing clusters such as Cape Verde. This approach is aimed at securing first-mover advantages in high-potential markets. We have further enhanced our global distribution and marketing platform, extending our reach beyond traditional source markets. This strengthened platform serves dual purposes: attracting third-party hoteliers for management and franchise opportunities while channeling more customers into TUI’s Central Customer Ecosystem worldwide.
Product growth in Cruises is driven by investment in new-build ships by our TUI Cruises JV, with the launch of Mein Schiff Relax in 2025 and a further launch of Mein Schiff Flow in 2026. Each vessel introduces enhanced differentiation through innovative product features and sustainability advancements.. Our UK Cruise business under the Marella Cruises brand continues to deliver high rates of customer satisfaction and results. We are also continuing to enhance our distribution platform for both TUI Cruises and Marella Cruises, with further app development to move from service to sales and deliver a more integrated customer experience, as well as exploring new source market opportunities.
In TUI Musement, we target global capacity growth, expanding our portfolio of experiences in sun and beach and city destinations, and integrating a new multi-day experiences category into our portfolio. We are also expanding our transfer portfolio, with the ability to sell shared transfers, private transfers and ride share / taxi integration. Our product strategy focuses on differentiation, curated products, improved quality and identifying opportunities for backward integration to capture further value, with own branded experiences as a key growth and profit driver. We continue to commercialise our Musement distribution platform, with a multi-channel strategy selling direct to customers, via TUI Markets and other travel providers.
(4) Marketing and customer retention / loyalty
Our marketing and distribution strategy is designed with the objective of growing volumes, maximising customer lifetime value, and lowering distribution costs by leveraging synergies across the Group. We are aiming to strengthen the TUI brand in growth segments such as Cities, Tours, Accommodation-only and Experiences. At the same time, we are working to expand our marketing base through stronger permission capture, scaling automated campaigns across all products and channels, and driving revenue with smarter cross-channel marketing. We will increase our focus on more digital channels like social media as well. Our objective is to engage customers more effectively, deliver greater personalisation, increase up- and cross-selling, and achieve efficiency gains in distribution.
(5) Future of search, AI-powered search and global platforms
The future of search is being reshaped by AI. Customers will increasingly move from typing queries into search engines to receiving direct, personalised answers from AI-powered platforms7. To succeed, our strategy is twofold. First, for OTA/search engine customers it is to make TUI content both “AI visible” and “AI bookable,” via AEO/GEO and the right partnerships. Second, for brand-specific customers (e.g. Robinson customers) we want to focus on differentiated content and making our brands “AI friendly” (e.g. scaling up online presence with reviews, videos, photos etc). End-to-end customer insights and data, along with trustworthy, verified content remain key to us. At the same time, AI unlocks the vision of the fully connected trip – from inspiration to booking to in-destination experiences. By using our data as a differentiating asset, we can deliver hyper-personalised offers, seamless connectivity across all touchpoints, and an end-to-end travel experience that only TUI can provide.
Our global platforms strategy is transforming TUI from a collection of local operations into a truly integrated global business. Instead of platforming everything in Markets at once, we previously announced we will platform by layer such as sales, production and sourcing. By shifting from market-by-market adoption to a modular component-by-component approach, we aim to accelerate delivery timeframes, reduce risk, and achieve higher productivity. All whilst being AI ready, given the huge opportunities this new technology is bringing8.
(6) Building a performance organisation
Our employees make a key contribution to TUI’s success with their commitment and motivation. To secure this success in the long run, we consistently pressed ahead with the initiatives defined in our People Strategy in the financial year under review.
The vision outlined in our People Strategy is for TUI to be digital, engaging and inclusive. To implement that vision, our People Strategy focuses on the following key areas of action:
- Simplification, Harmonisation, Focus
- Digital Transformation
- Enable Growth
- Positive Employee Experience
- Diversity, Equality and Inclusion
- Enable Best Performance
Based on these key areas of action, we are aiming to create a framework that enables our employees to deliver their best performance and work together successfully as a team to jointly secure the success of our Company.
Further information is provided in the section Own workforce (S1)
(7) Sustainability – driving positive change
As an industry leading Group, we want to set the standard for sustainability in the market. We believe that sustainable transformation should not be viewed solely as a cost factor, but that sustainability pays off – for society, for the environment, and for economic development. Our strategy is therefore underpinned by clear science-based goals and targets on sustainability. TUI’s Sustainability Agenda consists of three building blocks ‒ People, Planet and Progress.
People
- We will ensure that local people and communities benefit from tourism and the local supply chain.
- We will empower a generation of sustainability changemakers. TUI Care Foundation will drive positive social and environmental impacts in tourism communities around the world.
Planet
- In 2023, our emission reduction targets were recognised by the Science Based Targets initiative (SBTi). TUI commits to implementing these targets in line with the latest climate science findings.
- We will achieve net-zero emissions across our operations and supply chain by 2050 at the latest. We will change the way we use natural resources and become a circular business.
Progress
- Together with our partners, we will co-create the next-generation sustainable business model for the tourism industry through our Destination Co-Lab Rhodes.
- We will enable our customers to make sustainable holiday choices in every stage of the customer journey.
We already operate one of Europe’s most carbon-efficient airlines and we aim to continuously improve our environmental performance. We will build on the progress we have already made and reduce emissions further through our commitment to science-based targets and our emission reduction roadmap.
In financial year 2025, the relative CO2 emissions of our airline decreased by 0.4%, from 60.7 to 60.5 g/RPK9. With a nearly constant load factor compared to the previous year, this reduction is primarily attributable to our fleet modernisation, in which older aircraft were replaced by modern, more CO2-efficient models. In the 2025 financial year, we continued to operate 19 Boeing 787 aircraft. During the reporting period, we expanded our Boeing 737 Max fleet from 42 to 45 aircraft.
Further information is provided in the section Climate Change (E1)