Published on Wednesday, March 28, 2018

TUI buys tours and transfers provider from Hotbeds

TUI claims it will become the world's leading provider of services and activities at holiday destinations following the acquisition of Destination Management from bed bank Hotbeds.

Destination Management offers tours, transfers and other services in resorts to tour operators in more than 70 countries worldwide and handles around 2.2 million passengers a year.

As a result of the acquisition TUI said it was extending its global presence and the product portfolio of its Spanish subsidiary TUI Destination Services.

Following the takeover of Destination Management, which is subject to anti-trust approval, its Spanish subsidiary TUI Destination Services will have branches and staff in 48 countries, will employ over 9,000 people and generate sales of €700 million, it said.

"The global market for services at holiday destinations, as already offered by TUI Destination Services today, is estimated at around 140 billion euros and it offers considerable further potential for TUI," said the company.

"It is currently growing at around seven percent year on year. At the same time, with up to 350,000 micro-suppliers, this market segment is extremely fragmented on the supplier side and only to a small extent digitised. Already today, TUI Destination Services develops and arranges around 4.5 million excursions per year. This puts the TUI subsidiary among the top five providers in this business field worldwide.

"TUI Destination Services is already today far more than an intermediary. The Spanish company develops excursion programmes and services at the resort, organizes and accompanies them with its own staff. Thus, the company has a considerable influence on the diversity, exclusivity and quality of its offers."

The sale of Destination Management by Hotelbeds, which is worth €110 million, includes the brands Destination Services, Intercruises Shoreside and Port Services, and Pacific World.

TUI chief executive Fritz Joussen said: 'The global market for these services is growing. Four factors put TUI in an extremely good starting position: our strong international brand, the trust of 20 million customers, the trust of the destination countries through decades of presence and, most importantly, our world-class IT and CRM systems, in which we have invested in recent years.

"The TUI brand guarantees the usual premium service, TUI quality and TUI comfort despite the multitude and complexity of leisure offers and providers at the holiday destination. Our IT and CRM systems guarantee that our guests will only receive offers that are relevant to them. And they get them directly from us, not from third parties. Advice, booking, flight, hotel and leisure activities at the resort come from a single source. The customer has one contact person, that is TUI."

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