Tui plans ‘open’ destination-services platform

Tui plans ‘open’ destination-services platform

Tui will open its destination services platform to third-party providers following its re-acquisition of the destination management business the group sold as part of Hotelbeds two years ago.

Fritz Joussen, Tui Group chief executive, revealed the move as he reported half-year results on Wednesday, saying: “We have a clear strategy to offer experiences [in destinations].

“We want to stay number one in destination services. We sell 4.5 million Tui- branded excursions today. What will come on top is we will open the platform for third-party providers.

“You will be able to connect to our platform. That is the new vision.”

Tui announced it would acquire Hotelbeds’s destination services business for €110 million at the end of March.

The group sold Hotelbeds, which is primarily a bed bank business, in April 2016 for €1.2 billion to private equity group Cinven and the Canada pension Plan Investment Board.

Joussen confirmed: “We’re in the process of buying the destination business from Hotelbeds.

“We cover 48 countries with our experiences [already]. Two years ago, we worked to streamline the business and the bed bank was not a good fit to our strategy.

“There was a party who wanted to pay a good price [for the bed bank],” he said, adding the transaction “was incredibly fast”.

The bed bank and destination services were sold together. He said: “It was all on the same platform. We could not separate it or think about it a lot.

“Two years later we looked at activities [in destination]. Destination management was not particularly core to the bed bank. We came into discussions. The price was attractive, so we bought it back for half the valuation we sold it.”

He said: “We believe it will be a strong business going forward. It is a business in which digitisation plays an important role and we used the last two years to consolidate our destination management platform.

“It is a huge market with 300,000 providers. The market is huge, but it is hugely scattered. With digitisation we can do it better.”

However, Joussen insisted the Tui platform would not be open to any third-party provider. He said: “When you buy something from us it has to be Tui quality. Not everyone will be allowed. There will be a certain quality control.

“People will expect with our brand for it [an excursion] to be safe and for the provider to be there [when they go on holiday].”

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