This paper aims to comprehensively analyze the TUI Group’s business environment from the point of view of global aspects and a specific territory, the United Kingdom. Particularly, this document strives to interpret data obtained from the case study, the UK Government plan for restoring tourist destinations, and the annual reports of TUI Group. Moreover, this work provides the basis for a competent and correct understanding of the TUI Group conditions at the internal, macro, and micro levels.
Furthermore, the author should note that the internal business environment is a combination of the situational factors within an organization that is influenced by management decisions. These elements often include production, personnel, management organization, marketing, finance, and accounting. In contrast, the micro-business environment is the link between a company and its routine activities, responsible for a firm’s productivity and daily tasks. As a rule, it is understood as the subjects an organization constantly interacts with: buyers, suppliers, competitors, partners, contact audiences, sponsors, mass media, consultants, banks, and government agencies. Consequently, the macro-business environment means factors that do not affect a firm but have a decisive impact on its operations. A business is not directly interacting with them but must adapt to their behavior.
TUI Group is a public limited private sector organization by business type and a world-famous company whose services are based on the organization of recreation, leisure, travel, and tourism. According to its legal structure, TUI Group’s owners are TUI AG and TUI Travel PLC; its stock is listed on the German and London stock exchanges (Esener, 2022, para. 1-2). It was established as an industrial and transport institution, but in the 90s it focused on tourism and shipping (Aburumman, 2020, p. 1322). Due to fruitful cooperation with the British market, the company achieved leading positions.
TUI Group’s scale of operations unfolds in more than 180 countries in 31 key markets. It’s annual revenue for the last period was approximately 4.7 billion U.S. dollars, a smaller share than earnings before the pandemic (TUI Group, 2022, p. 5). The market share in the U.K. is about 20% among competitors (Statista Research Department, 2021, para. 1).Today, the firm operates over 50 thousand qualified employees worldwide.
TUI Group is a global company engaged in developing various services for tourists and travelers. Consequently, TUI Group’s activities relate to the tourism sector and industry (Nieminen, 2018, pp. 1-2). Currently, the firm has several tour operators and 1,600 travel agencies; it has 16 cruise lines and more than a hundred aircraft and hotels worldwide (Nieminen, 2018, pp. 1). Tourism is one of the largest and fastest-growing directions, whose economic growth is increasing yearly (Sofronov, 2018, p. 125). The choice of the sector allowed TUI Group to become one of the most rapidly progressing businesses in many aspects.
Direct and indirect competitors of TUI Group worldwide include HIS, Norwegian Cruise Line, Norwegian Cruise Line Holdings, and InvitedHome. Among the opponents directly in the UK, one can distinguish such firms as Thomas Cook, Jet2holidays, Lastminute.com, Travel Super Market, Love Holidays, On the Beach, Travel Republic Limited, Virgin Holidays, Tripadvisor, Inc., and KAYAK. They offersimilar services in the industry and completely different types of services, working with the target audience of TUI Group.
The company’s organizational structure is comprehended as the merger of TUI AG and TUI Travel PLC, aiming at an integrated business through responsibility for the entire company. It unites the spheres of tour operators, hotels, and cruises into one “association.” Among theleaders of TUI Group, it is recommended to single out Johan Lundgren, Elie Bruyninckx, Klaus Mangold, Fritz Joussen, Peter Long, and many others.
The COVID-19 outbreak has caused enormous damage to a wide range of internal processes of the company. The tourism sector and TUI Group were no exception against the backdrop of the unfolding coronavirus pandemic. For example, in 2021, the firm’s revenue fell by approximately 40% and by 58% in 2020 (Johann, 2022, p. 4). The organization received almost twice less income than the previous year (TUI Group, 2021, p. 5). Hence, TUI Group has lost hundreds of billions of dollars and millions of jobs. Nonetheless, the pandemic has additionally opened up new opportunities and revealed the inner potential of TUI Group. Therefore, TUI Group took advantage of the crisis lull, accelerating the sector’s reboot, carrying out digitalization, launching digital platforms and eco-friendly solutions, and changing approaches to the organization of tourism. Therefore, in contrast to the traditional methods, TUI Group has implemented a more advanced business model of providing customers with a comprehensive service based on digital management of the company’s relationship with clients (Johann, 2022, p. 4). Consequently, the COVID-19 pandemic “paralyzed” the business’s activities in the industry for a particular time but gave TUI Group an impetus to develop and improve internal elements.
Furthermore, the UK Government’s recovery plan played a unique, significant role in developing, improving, and modernizing TUI Group’s internal aspects. Most of the world’s population has adapted to life under travel restrictions; the sector has almost stopped since many tourists canceled trips, fearing a virus. TUI Group made every effort to restore the travel and tourism industry, and government support was also crucial for these actions.
Due to the “assistance” of the British state through the UK Government’s recovery plan, the company was able to establish at least part of its processes, avoiding possible risks and adverse consequences. The British leaders have decreased job losses, reduced financial damage, and stimulated demand for the firm’s services (Department for Digital, Culture, Media & Sport, 2021, p. 28). In addition, the UK created a grant system of 25,000 pounds for retail, hospitality, tourism, and leisure sector businesses that occupy rental properties (Department for Digital, Culture, Media & Sport, 2021, p. 4). Undoubtedly, a wide range of various innovations and shifts have led to drastic changes in the organization’s work, requiring rapid adaptation to new conditions, as well as more time, effort, and resources. Nonetheless, TUI Group again managed to succeed despite the predicament and “get away with this.”
Mainly, the UK Government’s recovery plan stimulated consumer spending and attendance in the country’s tourism, retail, hospitality, and culture sectors. Due to these innovations in the country and the market, TUI Group “won” at the micro-level without finally losing its customer base, reputation, and income. Nevertheless, the authorities can and should do more because right now, they have the opportunity to recognize the importance of the travel and tourism industry as a driving force for job creation and economic growth, as well as a mechanism for further ensuring equality, reducing poverty and increasing inclusiveness in society. In general, the interaction of TUI Group and the state within the framework of a particular program has yielded positive results. The efforts of the country’s leaders were justified, and TUI Group successfully overcame obstacles.
Particularly, COVID-19 has strongly impacted one of the largest travel companies at the micro-level in terms of demand and supply of travel services. For example, enormous damage has been done to the decline in the quality and quantity of services provided, as well as the reduction of the workforce in the UK (Allas et al., 2020, para. 1-4). TUI Group has lowered the level of remuneration for British employees, and local business structures of the organization were forced to look for additional sources of investment; the need to attract borrowed funds has increased. At the epicenter of the crisis were the company’s facilities that required significant regular capital investments, including hotels, cruise ships, and aircrafts.
Nevertheless, even though business losses were substantial, the coronavirus pandemic has impeded the development of domestic tourism in the UK by TUI Group. Specific measures have already been taken to support the tourism industry and individual companies like TUI Group. With all the negative consequences of the pandemic, it is essential to note the following important points. Thus, the modern tourism industry has been on the eve of significant changes for a long time. The situation developed due to the coronavirus outbreak has accelerated the approaching transformation. For example, the trends of the more active introduction of virtual and augmented reality technologies, as well as the economy of impressions, have become relevant. Hence, at the micro-level, TUI Group’s tools for meeting the needs of tourists have changed, although peoples’ needs have been and will remain the same. In general, the activities of TUI Group continue to recover relatively quickly because citizens need positive emotions.
Primarily, in order to conduct a full-fledged analysis of the TUI Group macro-environment, it is essential to refer to the following STEEPLE factors. Firstly, demographic, geographical, psychographic, behavioral, cultural, and spiritual components should be singled out among the social factors influencing the activities of TUI Group. The company should additionally take into account the interests of people, their statuses, classes, levels of education, work activities, attitudes to specific phenomena, and a number of other equally important aspects. As a rule, considering this information plays a unique role in building relationships with customers and affects how well TUI Group understands customers to improve marketing messages and change or eliminate them.
Secondly, from the point of view of technological phenomena, the organization’s operational activity is also influenced by the level of development of the transport field and technologies for the promotion of services, as well as the speed of technological distribution and the logistics processes. For example, if TUI Group had not turned to innovative technologies and revolutionary ideas, it likely would have collapsed against the background of COVID-19. Thirdly, economic factors affect the company through the quality of infrastructure in the travel and leisure industry, the level of inflation or unemployment, interest rates, exchange rates and the stability of countries’ currencies, and much more. Using this information in theory and applying it in practice allows the firm to predict and design the trajectory of growth and development.
Fourthly, ethical factors largely determine the company’s operational activities through various moral and ethical norms, standards, and rules generally accepted in the world, country, region, and state. Fifthly, in individual cases and phenomena, it is necessary to understand and imagine that political factors have a special significance, strength, and influence on the company’s work in general and in detail in a particular country or industry. In particular, among such phenomena, it is necessary to highlight the risks of military incursions into a specific territory, political stability or its absence, trade rules and tariffs, legislation, politics, and much more. Sixthly, the company should additionally take into account local factors, including labor laws, health and safety laws, data protection, discrimination laws, and more. Seventhly, environmental and natural aspects are also additional factors affecting the company’s operational activities. For instance,certain ecological norms and standards, as well as the weather and climate in a particular country, affect the profitability of organizing tours and travel to this region.
Taking into account the internal aspects, as well as the analysis of macro and microelements, TUI Group is recommended to resort to the following recommendations. Firstly, TUI Group should develop, supplement and improve both existing ones and create new directions in the field of tourism, surprising customers with innovations and revolutionary ideas. Secondly, it is recommended to focus on introducing various innovative solutions and technologies into business processes that attract a large part of the audience, maintain communication with clients and remain competitive among opponents in the sector. Moreover, tracking customer satisfaction by creating feedback loops using technology is essential. Thirdly, it is necessary to have a “safety cushion” in unforeseen conditions, as was the case with the COVID-19 outbreak, and also invest in staff training, emphasizing the importance of fun and entertainment for tourists.
TUI Group can benefit from the UK government’s tourism recovery plan by creating and promoting new tourist routes in the country and expanding the business. Due to the support, TUI Group should adequately allocate resources to meet the needs of customers from Britain and develop domestic tourism and travel in their native country. The company should contribute to more sustainable development and improve international relations.
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