Comprehensive Business Environment Analysis of TUI Group Operations

This report provides a comprehensive analysis of TUI Group's business environment, examining the internal, micro, and macro factors influencing its operations. It begins with a business overview of TUI Group, a leading tourism and hospitality company, highlighting its integrated model, diverse services, and market position. The core of the report focuses on the impacts of the COVID-19 pandemic on TUI's internal and micro environments, detailing the challenges faced, such as travel restrictions, job losses, and the need for digitalization. The report also assesses the influence of the UK government's recovery plan, including job retention schemes and safety guidelines. Furthermore, it explores the STEEPLE factors (socio-cultural, technological, economic, environmental, political, legal, and ethical) affecting TUI's operations. The analysis includes recommendations for improvement and concludes with a summary of the findings, emphasizing the importance of online platforms and effective management for future growth.

Business Environment

TABLE OF CONTENTS
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
Business Overview.......................................................................................................................3
Impacts of covid-19 pandemic on internal environment of TUI group.......................................4
Impact of UK Government recovery plan on TUI group............................................................5
Impact of covid 19 pandemic on micro environment of TUI group............................................5
Impact of UK Government recovery plan on micro environment...............................................6
Impact of STEEPLE factors on TUI group's operations..............................................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business environment refers to sum of internal and external factors of business which can
impact operations of business. The external factors of business are beyond the control of
organization and has significant impact on functioning and growth of business. Internal business
environment includes culture, events, members and factors within organization which can impact
the decision- making process of business. External environment which is also known as macro
environment includes factors which are outside the organization and it is beyond control of
organization and may impact business operations. External environment determines
opportunities and threats which may influence choices of business makers. Micro environment
operating environment as functioning of it has direct impact on business. The aim of project is to
enable understanding of internal, macro and micro environment of business. Project is about TUI
group and impact of pandemic on its operations. Impacts of recovery plan of UK Government on
internal and micro environment of company is being highlighted. It also includes impact of
STEEPLE factors on TUI group along with suggestions of improvement through analysis of
micro, macro and internal environment. Project also highlights recommendations on benefits of
UK Government tourism recovery plan on TUI groups.
MAIN BODY
Business Overview
TUI Group is German leisure engaged in hospitality and tourism industry. It is world's
leading tourism industry which covers entire tourism chain under one roof. The reason behind its
leading in tourism industry is its corporate culture which is its global responsibility. The aim of
TUI group is to create unforgettable moments for customers and to make their dreams come true.
They collaborate with countries and in committed and sustainable manner TUI group help to
shape their futures (Buijtendijk, van Heiningen and Duineveld, 2021). The integrated model of
TUI groups enable it to attract large customer volume and also has distribution power of source
market. It gives differentiate products and services to its customers which has created entry

barrier for other companies in industry. The group comprises more than 400 hotels, luxury ships
and cruises and airlines. It is a leading tourism business combining digital platform with local
service delivery. Company has revenue of more than 2000 million Euro for the year March 2022.
Company has more than 10000 employees in UK and Ireland and more than 50000
employees work in worldwide. The Company provides unique holiday packages along with
portfolio of hotels and ships which enables it to provide excellent holiday experience to its
customers and competitive advantages. Company has around 20% of market shares in UK
market offering package holidays (Background of company, 2022). TUI group provide products
such as charter and scheduled passenger airlines, cruise lines, package holidays, hotels and
resort. Company provides travel agency services to its customers which make it easier for them
to plan their holidays. The effective and efficient employees of company enables it to attract
customers and increase market shares. Employees of TUI group enjoys flexibility while keeping
higher performance and efficiency.
The merger of TUI AG and TUI travel PLC has enabled company to increase its
performance and progress faster. Company has created a simple organizational structure with a
focus on integrated tourism business with clear responsibilities and accountability of every
member across group. The new organizational structure with full integration of tour operations,
hotels and cruise operations has created flatter hierarchy and allows company to effectively and
efficiently operate in market (Khanna and et.al., 2020). Different operations of company such as
tour, hotel and cruise operations have come under one organization which has resulted into
numerous changes in roles and responsibilities. The sales and marketing of company is divided
in three regions: Northern, central and western regions. The top competitors of TUI group are
HIS, Norwegian Cruise Line Holdings and Invited home.
Impacts of covid-19 pandemic on internal environment of TUI group
Due to emergence of covid 19, Government put travel restriction which has resulted into
downfall in operations of TUI group. Numerous of flights and holiday packages were cancelled
leading to loss in business. This has impacted internal environment of TUI group. The greatest
crisis faced by company during pandemic was cut of numerous jobs worldwide. Company had to
create a safe working environment for its employees to enable them to feel safe. TUI group had
reduced working hours of employees and pandemic had enabled employees to identify their

other skills. Many employees had medical knowledge which has made them qualified to support
hospitals and medical institutions (Nazli, 2022). IT team were engaged in to identify workloads
which can be used to minimize operating costs of company. Pandemic had also impacted
customers of TUI group as they were not able to return home. TUI group had to ensure that its
customers who were on tour during pandemic could safely reach their homes. Company had
provided better and accurate information to its customers and ensured that system required to
ensure safe return of customers were in top shape. Company had to cancel many holiday
packages and provide discounts to customers to ensure rebooking of package after pandemic.
Impact of UK Government recovery plan on TUI group
There was a great impact of pandemic on employees, customers, etc. of company. The
travel restriction has prohibited the customers of company to return their homes. There was a cut
off in jobs worldwide due to loss in operations. UK's government had launched recovery plan to
enable companies to mitigate their losses due to pandemic. Government had launched many job
retention schemes which were beneficial for employees as they were not sent off from their jobs.
TUI group had to retain their employees and pay them salary due to this scheme. The
government had aimed to reopen tourism business safely and profitably (Zhang and et.al., 2021).
It has introduced many guidelines for safe operations of business and to promote tourism in UK.
The guidelines have enabled company to start its operations and to mitigate the losses which
were incurred during pandemic period. Company had provided discounts to its customers to
rebook their holiday package. Government followed safety to make tourist feel safe to travel
across UK. Government had also instructed financial institutions to waive off or to reduce
interest rates during pandemic. UK Government has provided loans and subsidies to businesses
for opening new company in tourism sector which has increased competition for TUI group.
Impact of covid 19 pandemic on micro environment of TUI group
Tourism is a labour-intensive sector and pandemic had a very big impact on labour and
employment. Customer retention and loyalty is very essential for success of company. TUI group
had to ensure long-lasting relationship with its customer, employees and suppliers for future
success. Pandemic had impacted the relationship of company as it had to sent off many
employees from company due to losses in operations and to reduce cost. Company had to

digitalize its operations which may affect staff commitments and future performance and service
quality of employees. Restriction of movement of people from one place to another had impacted
business of TUI group (Filimonau, Derqui and Matute, 2020). To maintain strong relationship
with customers TUI had launched a system which provided its customers with accurate
information about their queries. Company had to ensure that refunds were given to customers
who had booked for package during pandemic. This was a time-consuming process which had an
impact on future bookings. Pandemic has also impacted relationship of TUI group with its
suppliers. To provide effective services to its customers it had contracts with hotels. The non-
payments for services provided by suppliers to TUI group had affected the relationship.
Impact of UK Government recovery plan on micro environment
The reopening of tourism activities by Government had benefited companies operating in
tourism sectors. TUI was able to accept bookings from customers for holiday packages and
discounts which were provided by it has enabled it to retain its customers. The safety and
security measures taken by government had made it easier for company to start its operations.
The change in preferences of tourists had opened opportunities in places where tourism was not
there (Hepburn and et.al., 2020). This has enabled company to expand its business at those
places. Due to pandemic company was able to turn into online business which has given it more
scope of expansion. Government has provided loans and subsidies which has helped TUI to
invest in new projects and to expand business. Mitigation of losses and increase in opportunities
had increased demand for employees and enabled company to develop strong relationship with
employees. The CSR activities of company during pandemic has build brand image of company
and increased customer base.
Impact of STEEPLE factors on TUI group's operations
The STEEPLE analysis tool is used to evaluate the macro environment of business this
includes socio-cultural factors, technological factors, economic factors, environmental factors,
political factors. Legal factors and ethical factors.
Political factors
Political factors have big impact on TUI group as it may impact the profitability of
company. Company is abided to comply with all rules and regulations imposed by Government

of every country in which it is operating (Aburumman, 2020). The change in taxation policies or
any other political rules and regulations impacts the operation and profit of company. TUI
group has to keep close observations on political changes by maintaining relationship with local
and national government.
Economic factors
Employment policies of country and unemployment rate also impacts business
operations. It is a good thing for TUI group as it provides job opportunities to locals with choices
of workforce and certain positions. The changes in interest rate influences profit margin of
company as TUI takes loans for certain new projects. TUI operates worldwide, increase in
inflation rate may impact its operational cost and demand.
Socio-cultural factors
Social factors includes age distribution, income levels, education, population growth, etc.
It is very essential for company to manage employees as conflicts among them may impact
productivity of company (STEEPLE analysis, 2022). Tourism sector has to deal with various
customers with diverse preferences and tastes. Company has to look after each customer's
preferences and tastes to ensure customer satisfaction and retention.
Technological factors
Advancement in technology has enabled company to turn its business online by taking
online bookings from its customers. Technology and online business had cut off cost and
increased profit margin of company. Technology has made it easier for company to communicate
with its customers and suppliers.
Environmental factors
TUI has invested in new plans with more efficiency this has enabled company to operate
as an environmental friendly company (Chuang and Huang, 2018). Fluctuation in fuel price is a
major environmental factor which may have positive impact on operations of company. Decrease
in fuel price will decrease cost of travelling and increase demand for tourism and hospitality.
Legal factors
Legal factors refer to laws and policies imposed by government in countries to protect
rights of individuals. Company has airline services where there are laws related to air traffic,
safety and security. Company has to comply with all laws related to airlines and to offer high

quality services. TUI is operating in various countries and has to comply with laws which are
imposed by government of different countries.
Ethical factors
There are many business ethics that are to be followed by organization for smooth
functioning of business. Company has to engage itself in CSR activities to build positive image
among customers and to increase its revenue.
CONCLUSION
TUI group can expand its business through online platform by taking bookings from
customers online. This will increase pre booking for holiday packages and company will be able
to effectively and efficiently operate. The website of company can provide all information about
the products and services of company and also enable to resolve timely queries of customers.
Company will be able to build strong relationship with its customers by providing high quality
services. CSR activities by company can help it to operate as environmental friendly and build a
positive image among its customers. The Government recovery plan has enabled company to
expand its business and to mitigate losses due to pandemic. Government is focusing on
expansion of tourism sector as it has large contribution to economy and GDP of country.
Government is providing loans and subsidies which can help company to expand its hospitality
and tourism business. The project had highlighted the impacts of covid 19 on internal and micro
environment of TUI group along with impact of recovery plans by government. The STEEPEL
analysis had enabled to understand the external factors that may impact operations of TUI group.

REFERENCES
Books and Journals
Aburumman, A. H., 2020. The concept of global governance in tourism franchises: a case study
of TUI group. Entrepreneurship and Sustainability Issues. 8(2). p.1321.
Buijtendijk, H., van Heiningen, J. and Duineveld, M., 2021. The productive role of innovation in
a large tourism organisation (TUI). Tourism Management. 85. p.104312.
Chuang, S. P. and Huang, S. J., 2018. The effect of environmental corporate social responsibility
on environmental performance and business competitiveness: The mediation of green
information technology capital. Journal of business ethics. 150(4). pp.991-1009.
Filimonau, V., Derqui, B. and Matute, J., 2020. The COVID-19 pandemic and organisational
commitment of senior hotel managers. International Journal of Hospitality
Management. 91. p.102659.
Hepburn, C. and et.al., 2020. Will COVID-19 fiscal recovery packages accelerate or retard
progress on climate change?. Oxford Review of Economic Policy. 36(Supplement_1).
pp.S359-S381.
Khanna, A. and et.al., 2020, November. Blockchain technology for hospitality industry. In
European, Mediterranean, and Middle Eastern Conference on Information Systems (pp.
99-112). Springer, Cham.
Nazli, M., 2022. Tourist guides facing the impacts of the pandemic COVID-19. Current Issues
in Tourism. 25(12). pp.1866-1870.
Zhang, H. and et.al., 2021. Forecasting tourism recovery amid COVID-19. Annals of Tourism
Research. 87. p.103149.
Online
Background of company, 2022. [Online]. Available through:
<https://www.globaldata.com/company-profile/tui-ag/>
STEEPLE analysis, 2022. [Online]. Available through:
<https://www.ukessays.com/essays/tourism/an-analysis-of-the-tui-group-tourism-
essay.php>