European travel giant TUI Group is integrating its "destination experiences" business into its global CRM platform, giving it the ability to cross-sell the inventory to customers during the post-booking pre-trip phase.
The update came in its H1s released today. TUI's financial year runs from the start of October to the end of September, with the October-to-March period usually loss-making.
In the first half of the current year it has managed to reduce these losses, reporting an underlying EBITA loss of €158.6 million, which is a 26% improvement on last year. Turnover was up 7.2% to 6.81 billion euros.
This first half loss is one of the last reminders of its vertically integrated tour operator legacy. It still sells "package holidays" but has transitioned into a hotel operator, a cruise line and most recently, a tours and activities provider. Or in TUI-speak, "destination experiences".
TUI's destination experiences ambitions were brought into the spotlight this year, beginning with the announcement at its AGM in February that this would be a strategic growth area for the business. TUI followed this up with a deal to buy the destination services businesses of Hotelbeds Group.
Another relevant example of TUI's repositioning is the continued increase in the proportion of business which is transacted online - in the first half of the year the figure was 49%, up from 47% in the same period last year. And the amount of business it transacts itself, direct rather than through third parties, is also on the up, coming in at 74%, compared with 73% last time.
This is where the potential of its "destination experiences" unit starts to emerge. With three in four passengers booking direct, these bookings go through its global "One CRM" platform. TUI says that this gives it "a four to six month exclusive marketing period" to cross-sell its destination experiences product to customers - no other destination services provider will get access.
And with everything going through the One CRM platform, TUI has "knowledge of [the] customer [which] allows tailored and individualized marketing" adding that this targeted marketing generates higher ancillary business conversion rates.
TUI carries some 20 million passengers a year, so this is a significant captive audience. However, it is also interested in working with third party customers. For example, one of the businesses it acquired from Hotelbeds Group was InterCruises, a handling agent for cruise companies, already works with millions of cruise passengers at 400 ports worldwide.
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