European travel giant TUI has announced plans for a digitally led expansion into new source markets, including China, with little indication that these plans involve opening TUI-branded retail outlets in Shanghai, Sao Paulo or Seville.
On a busy day for TUI - first quarter results and the sale of its Travelopia business as well as its AGM - it also announced its "TUI 2022" strategy. The aim is to add one million new customers and an extra billion euros turnover by tapping new source markets such as Spain, Portugal, Brazil and China.
A statement said:
"This will primarily be achieved on the basis of a digital, standardised, globally scalable software architecture as well as global expansion of the strong TUI master brand"
and not much else, apart from an infographic.
However, CEO Fritz Joussen went into a bit more detail in his speech at yesterday's AGM, a translation of which has been posted online.
The initiative will be led by its head of IT (including digital) and new markets Frank Rosenberger, who joined the business at the end of last year from Vodafone where he was in charge of global development of new business areas.
The connection between IT and new markets is the driving force behind TUI 2022. Joussen said that its digitalisation work over the past two years gives TUI the scalable and standardised infrastructure needed to tackle the new markets.
"We will develop our business in these markets differently than we did in the traditional European markets decades ago," he said, noting that to succeed in a low-margin sector such as travel, TUI needed to keep its market entry costs down.
The TUI boss's use of phrases such as standardisation and scalability sound like the sort of thing Dara Khosrowshahi of Expedia Inc was talking about a few years ago - the idea that for a travel brand to succeed on a truly global scale there needs to be a single IT infrastructure in place which can work across geographies.
The release announcing Rosenberger's appointment said that TUI is already in China via a "cooperation scheme with Chinese online provider Alibaba’s travel platform".
Perhaps that is a hint about how it plans to take on China, selling its inventory through digital marketplaces rather than expensive shops. But however the finer details pan out, chances are that its presence in China will be more online than on the high street.
Related reading from Tnooz:
Welcome to China, Thomas Cook (March 2015)