TUI Travel Agency: Strategic Analysis, Challenges and Solutions Report

This report provides a comprehensive analysis of TUI Travel Agency, a leading global travel organization. It begins by examining TUI's current strategic position, highlighting its focus on customer satisfaction and shareholder value through strategies like embedding, climate change initiatives, and customer-centric approaches. The report then identifies four key challenges faced by TUI, including increased competition, price transparency due to internet accessibility, decreasing customer loyalty, and the diminishing sense of mystery in travel. The core of the report focuses on addressing the challenge of decreasing customer loyalty. It evaluates potential solutions, such as offering special deals and discounts to loyal customers and providing additional benefits, such as exclusive experiences during trips. The report concludes with a discussion on how the chosen solution, providing additional benefits, could be practically implemented through a membership program and partnerships with popular destinations. The report also touches upon the impact of Brexit on TUI's operations and strategies, emphasizing the need for adaptation in the face of changing market dynamics. Finally, the report references various academic sources to support its analysis.

T U I Travel agency

Table of Contents
INTRODUCTION................................................................................................................................3
TASK 1.................................................................................................................................................3
1. Analyse your company’s current strategic position.....................................................................3
2. Identify and discuss four challenges the company faces.............................................................4
3. Identify and evaluate the various solutions the company could use to address ONE of these
challenges.........................................................................................................................................4
4. Analyse how the chosen solution could be practically implemented at the company.................5
CONCLUSION....................................................................................................................................5
REFERENCES.....................................................................................................................................6

INTRODUCTION
TUI travel agency is one of the leading travel agency in the world, and it was founded on 3rd
September, 2007. It was founded by the merger of First Choice Holiday Plc and the Tourist Division
of TUI AG. Today organisation is performing their activities in around 180 countries and has served
about 30 million customers. The head quarter of them is at Crawley, England, UK. They are leading
charter airline of the world, which provide services of charter planes in different nations of the
world (Fountoulaki, Leue and Jung, 2015)1. This report is based on TUI travel agency and will help
in gaining some knowledge about the current strategic position of them. Along with this, a
discussion will take place on challenges that they are facing with solution that they can apply to
solve that problem. Also light will get focused on that how solution can get practically
implemented.
TASK 1
1. Analyse your company’s current strategic position
TUI travel agency is one of the leading travel organisation in the world, they use to provide
ample number of products and services to their customers. This help them in making their
customers satisfied, and also help them in providing quality services for them. The main goal of
TUI travel agency is to make a good shareholder value of them by leading the travel groups which
provide holiday services at global level. Main strategies which is used by TUI travel agency for
sustaining their development are Embedding, Climate change, Destination, Our people and our
customers. Since from 1998 to 2005, the main goal of them was to achieve cost control and also
differentiation in their products (Aguiar-Quintana, Moreno-Gil and Picazo-Peral, 2016)2. For
achieving this, they have adopted hybrid strategies which is combination of differentiation, price
and cost control (Strategies of TUI travel agency, 2019)3. Under this strategy, they use to make
unique and different holiday packages for their customers, by which the margin of them also get
improved. This also help them in making clear image and brand portfolio in market, along with this
1 Fountoulaki, P., Leue, M. C. and Jung, T., 2015. Distribution channels for travel and
tourism: The case of Crete. In Information and Communication Technologies in Tourism
2015(pp. 667-680). Springer, Cham.
2 Aguiar-Quintana, T., Moreno-Gil, S. and Picazo-Peral, P., 2016. How could
traditional travel agencies improve their competitiveness and survive? A qualitative study in
Spain. Tourism Management Perspectives. 20. pp.98-108.
3 Strategies of TUI travel agency. 2019. [Online] Available through :
<https://www.ukessays.com/essays/tourism/an-analysis-of-the-tui-group-tourism-
essay.php>./

it improve the brand loyalty and also help them in gaining some competitive advantage in market
place. There are five key elements of strategies used by TUI travel agency, which are as follow :-
1. Expand our core tourism business,
2. Exploit synergies and cost efficiencies across our market and product,
3. Leverage the benefits of our vertically integrated tourism model and our wide distribution
network,
4. Identify new trend and exploit development in tourism sector,
5. Continue to grow our container shipping business.
The withdrawal of United Kingdom from the EU (European Union) is known as Brexit. It
has poses several impact on the economy of nation. This also has affected the functioning of TUI
travel agency and also have impact over their strategies.
2. Identify and discuss four challenges the company faces.
Time is changing with high speed, and with this changing time, challenges for travel
agencies has increased. Therefore, now it is not very much easy for any travel agency to perform
their activities ( Hapenciuc, Stanciu and Costea, 2014)4. Major challenges which are faced by TUI
travel agency are as follow :-
1. More choice than ever : When it come to choice for customer in market place, the number
of service provider has been increased due to which the competition among new and
existing agencies has increased (Robinson and et. al, 2016)5. Along with this, the choice of
destination for holidays also been increased, which is also a big challenge for TUI agency.
2. Increasing price transparency : Now a days, every one of aware about internet and every
person in world use internet in their daily life. This has make it very easy for every person to
gain knowledge about the price of tour they are planning for (Šuleić, Dragin and Dragićević,
2014)6. This has increased the challenge of price for TUI travel agency and also reduces
their profit margin.
4 Hapenciuc, C. V., Stanciu, P. and Costea, M., 2014. Integration of the Sap Concept in
the Employee Assessment Of Travel Agencies In Suceava County Through Mystery Shopping
Type Methods. Revista de turism-studii si cercetari in turism. (17). pp.22-29.
5 Robinson, P. and et.al ., 2016. Operations management in the travel industry. Cabi.
6 Šuleić, M., Dragin, A. and Dragićević, V., 2015. The relationship of a foreign tour
operator in Serbia towards tourists based on the example of TUI. Turizam. 19(1). pp.1-12.

3. Decreasing customer loyalty : There are ample number of travel agencies in market place,
which are providing holiday tour packages at very low cost (Andreş, 2016)7. This is used by
them for attracting the loyal customer of organisation like TUI travel agency, by which the
number of loyal customer get decreased.
4. Travel is not mysterious as it used to be : Earlier, travelling to some place was like very
much mysterious, and also use to provide ample number of surprises to travellers (Gössling
and Lane, 2015)8. But with the help of latest technology, the mystery of any place is
decreasing, which results to reduction in curiosity of people.
3. Identify and evaluate the various solutions the company could use to address ONE of these
challenges
TUI travel agency have to make solutions for these challenges, so that they can again some
competitive advantages and also can retain their customers. For this, hey have to make proper
strategies and plans, so that their solution can get implemented in effective manner and they can get
best result. The major challenge for which they have to find solution is decrease in number of loyal
customer. For solving this, they have to make strategies by which they can retain and also which
can help them in increasing the number of loyal customers ( McKercher, Mak and Wong, 2014)9.
The best solution for this is that, they can provide some special offers to their loyal customers, so
that they can get attracted towards them. Also they can provide some discount to them on their
bookings, along with this they can provide some additional benefit to their loyal customer at trip, so
that they can get extraordinary experiences. These solution can help TUI travel agent in improving
their customer loyalty and also help them in improving their goodwill in market place.
4. Analyse how the chosen solution could be practically implemented at the company.
From the above mentioned solutions, the best solution which TUI travel agent can chose for
retaining their loyal customers and also for increasing the number of their loyal customers is that,
providing some additional benefits to them, so that they can get some extraordinary experience on
their trip. For applying this practically, it is important for them to make proper set where they can
7 Andreş, S., 2016. MANAGERIAL ANALYSIS REGARDING THE STRATEGIC
PREMISES OF TWO LARGE TOURISM AGENCIES. Robotica & Management. 21(1).
8 Gössling, S. and Lane, B., 2015. Rural tourism and the development of Internet-based
accommodation booking platforms: a study in the advantages, dangers and implications of
innovation. Journal of Sustainable Tourism. 23(8-9). pp.1386-1403.
9 McKercher, B., Mak, B. and Wong, S., 2014. Does climate change matter to the travel
trade?. Journal of Sustainable Tourism. 22(5). pp.685-704.Šuleić, M., Dragin, A. and
Dragićević, V., 2014. Business ethics of tour operators: The case study of
TUI. Turizam. 18(4). pp.154-165.

identify their loyal customers and provide them benefit accordingly. For this, they have to make
membership of their customers, and have to check the membership points of them at the time of
booking. This will help TUI travel agent in gaining detail that how loyal the customer is. Along with
this, they have make contracts with different organisations at different destinations which are very
much popular ( Šuleić, Dragin and Dragićević, 2015)10. Then TUI travel agency have to provide
services of that organisations to their customers at some benefit, this will help them in increasing
the number of loyal customers and also helps in retaining their loyal customers.
CONCLUSION
From the above report, it has been concluded that TUI travel agency is one of the leading
tourism service provider of the world. There are ample number of strategies which are used by them
for maintaining their strategic position and also Brexit has poses impact on them. Along with this,
there are ample number of challenges which they use to face while performing their activities in
market place. For this they have ample number of solutions, that must be applied on practical
manner so that they can again some competitive advantages.
REFERENCES
Books and Journal
Online
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