By the end of 2024, TUI Group will end its long-standing membership in the German Travel Association (DRV). The tourism giant says the reason for the split is because of lacklustre work of the association. Many Experts and the public are registering concern over the dissolution of such a longstanding relationship. TUI issued a statement declaring the split would allow the company to better focus on international challenges and outgoing tourism. But the move by TUI signals much deeper problems for the industry.
Obviously, the DRV is not happy about TUI’s decision but also acknowledges that the shakeup will help the organization create a more competitive operation in the future. TUI has stressed that the current competitive landscape and recent events, such as the insolvency of tour operator FTI, have highlighted the unequal burden on companies and the different protection provided to customers. While German tour operators are subject to strict national and EU regulations, many international competitors enjoy less stringent requirements, which strengthens their competitiveness. TUI’s efforts to gain an even bigger competitive advantage should be a warning sign to not only hoteliers and destinations, but to environmentalists and those concerned with regenerative tourism taking the place of overtourism.
Recently, Sebastian Ebel, CEO of TUI, aired his company’s criticism of the work of the DRV and praised the work of Marija Linnhoff, chairwoman of the VUSR. Ebel emphasized that Linnhoff was taking on tasks that should actually be the responsibility of the DRV. TUI’s withdrawal from the DRV will probably have far-reaching consequences for the German tourism industry. However, as big as the German industry shakeup will be, the international ramifications of Ebel’s strategy may prove catastrophic in the long term.
TUI’s Future Course
According to the news, TUI plans to strengthen its political advocacy through its offices in Berlin and Brussels, and by its policy team for the destinations. The goal is to create better competitive conditions at the political level and to protect the interests of consumers. The group will continue to seek dialogue with all industry partners in order to strengthen package holidays and prevent additional burdens for companies and customers.
TUI’s exit from the German Travel Association is a significant turning point for the German tourism industry. The move accents the challenges that German tour operators and travel agencies face in a global market. The plan for the future includes increased lobbying to convert the political landscape in favor of the group’s development. At least this is how the news from the company reads. While the company talks about overall competitiveness, the move toward positioning the company more closely to government regulators seems suspect. After all, without the German people’s confidence, and the German government’s propping up of the company during the pandemic, TUI Group would probably not exist at all.
Now the DRV must assist its members and follow TUI’s example of shifting into lobbying mode. In the long run, given the widespread effects TUI and other major players are having on destinations and situations like overtourism, logic tells us this latest move is a warning that company’s like TUI are seeking an even greater monopoly on the tourism business. At least, this is my take. TUI Group is already the largest travel and tourism company on the planet. The megalith owns several travel agencies, hotel chains, cruise lines, scores of retail shops, and five European airlines. The company also dictates to more than 60 independent hotels not owned by the group. Here on Crete, hotels can no longer afford to hire Greeks to tend to hotel clients because TUI has driven prices down so low. The largest of the Greek Islands is quickly becoming a cheapo destination where retail shops and restaurants are closing one after the other. TUI criticizing the DRV for not snaring more influence for Sebastian Ebel’s company is like Roman admirals whipping their dead oarsmen to row faster.
My take? Be careful of companies where growth is their only true mission.