Europe’s largest travel group TUI wants to secure its future growth by offering a larger range of cheaper holiday packages.
• TUI wants to expand its budget travel offerings
• Market share in this segment can still be significantly expanded
• Profitability remains the focus despite expansion in the budget travel sector
In a conversation with the “Handelsblatt”, TUI CEO Sebastian Ebel explained that the travel group wanted to focus more on the so-called budget segment. These are holiday offers below the premium level, where TUI is traditionally strong. According to the manager, TUI is the market leader for high-quality trips. “But we also want to be an attractive provider in the lower price segment and win customers. Here we only have a market share of 10 to 15 percent,” Ebel continued. Due to the potential this offers, this area is particularly interesting for the future growth of the group.
The plans mark a significant strategic adjustment in the development of the tourism group: in recent years, TUI has focused primarily on high-quality travel experiences and has invested in hotels, cruises and adventure offers. The company was recently able to record significant profitable growth in these areas and report record results: Group sales rose to over 24 billion euros in the 2025 financial year, and the operating result reached a new record level of 1.46 billion euros.
New opportunities in saturated markets
According to “Handelsblatt”, the motivation for the strategic pivot lies in the increasing saturation of the classic TUI customer segments, especially in established markets such as Germany and Great Britain. Offers in the premium and mid-range segments are highly competitive there and the growth potential is considered limited.
In addition to the premium offers, TUI already has two platforms that operate in the lower price segment: the Ltur and First Choice brands. According to the CEO, these brands should play a larger role in the future: “We want to use their experience and technology and are working on how we can appeal to this customer segment even more,” said the TUI boss to the “Handelsblatt”. He emphasized that profitability and maintaining margins will remain the focus for TUI despite the focus on cheaper offers. “We also pay attention to the margin and profitable growth there,” Ebel told the news portal.
Competitive pressure and new forms of offering
The decision to adjust the strategy was probably made against the background of growing competitive pressure from online platforms, low-cost airlines and specialized low-cost providers that particularly appeal to price-sensitive holidaymakers.
TUI now faces the challenge of growing in a sensitive price segment without giving up its tough positioning in the premium and experience segment. The focus on margin-saving expansion into the budget segment is likely to be of interest to investors and market observers alike, especially since TUI continues to focus on profitable growth as its strategic maxim. Given recent record results and broader market dynamics, this move could take the tourism giant into a new phase of competitiveness – provided it manages to maintain the balance between price attractiveness and economic soundness.
Investors have been confident so far: on Monday, the TUI share temporarily rose by 0.88 percent to 9.40 euros via XETRA.
Editorial team finanzen.net
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