In his first press interview because becoming CEO of TUI Musement a bit more than a month ago, it’s clear that Peter Ulwahn is attempting to use TUI’s trip operator tradition to benefit in developing the company’s trips and activities service– however that can be a mixed structure.
Ulwahn pointed out in a Skift interview recently that an essential part of his program is building TUI Collections, the tours and activities that TUI operates from owning the buses to using the tourist guide. He declared that TUI Collections is seven times bigger than European market leader GetYourGuide’s self-operated tours.
One just require to take a look at the epidemic of missed flights because of meandering and exceedingly lengthy security lanes in Amsterdam and London over the last couple of days to comprehend why there has actually been much talk in the travel market just recently about Reservation Holdings’ push to relieve myriad tourist hassles throughout a journey through a “linked trip.” However Ulwahn mentioned that TUI already provides one to a terrific extent– albeit manually– due to the fact that it has more than 1,000 customer service agents keeping track of journeys for travelers. He admitted, however, that automating that process is truly difficult and TUI needs to buy that technology.
On the downside of the ledger, while parts of the TUI company are digital and getting more so– Ulwahn said 100 percent of TUI Nordic is online– much of TUI Musement’s business is still done off line, although a mobile app is getting traction, he stated.
Moms and dad business TUI sees its Musement trips and activities segment as a key development driver for the total business, and believes that advantage will originate from additional integration of TUI and Milan-based Musement, acquired in 2018, third-party sales, increased digitalization, and dynamic product packaging.
Ulwahn operated in a variety of location experiences and digital velocity roles at TUI and Musement because 2015 prior to assuming the TUI Musement CEO role May 1. Skift discussed Musement’s method and direction with Ulwahn last week. The interview was edited for clarity and length.
Skift: In your brand-new role, you got on board, what did you need to do? What was your most significant challenge? How did you take a look at it?
Peter Ulwahn: In the last number of years I have actually been working on the digital change and belonged to the due diligence group and the management team when we did the acquisition of Musement [in 2018] My main focus today is to ramp back from the pandemic and execute the strategy currently in location.”
Skift: So what does that suggest? What do you need to do?
Ulwahn: There is a history of big corporations and startups. We were actually conscious about that when we did the acquisition of Musement. We were truly mindful about that to ensure that we would do whatever we might to take as much benefit and worth from the Milan team. So, we kept them as separate as possible and as incorporated as needed for them to ramp up and run with it. In this in 2015 today, we have actually been, now, because they have actually been going from 70-100 individuals as much as 300 people based in Milan. So, we’ve been ramping up the group. We have actually now combined it. So, from that point of view the change are done. We are now one department, one, one business, TUI Musement, and the team is there. I think the difficulty is right now is more the operational part. So, we’re going from low customer volumes into big customer volumes, making sure that we can do whatever we can in terms of getting the best possible consumer experience.
Skift: And what kind of consumer volumes are you seeing right now?
Ulwahn: We are back to for the summertime to pre-Covid 19 numbers, which is good, after an actually sluggish summertime last year.
Skift: Is TUI the airline company seeing a rise in airlines tickets that the other airline companies are? And how does that ultimately impact your experiences service?
Ulwahn: TUI has an airline company. But we likewise are depending a lot on third-party airline companies, as well, in source markets. So, from that viewpoint, we do not see any volume modifications or anything like that for the summer. We still see that the client demand is there and they really would like to travel this summertime.
Skift: And inflation, as well? You’re not seeing people setting aside their itinerary?
Ulwahn: No, no. We do not see that. Not from that aspect.
Skift: You stated you were helping with TUI’s digital transformation. So, in basic, how is that going and how do you see that in terms of the digital transformation that has to take place in the trips and activities sector?
Ulwahn: I believe it’s actually intriguing. So, I’m coming from the Nordics. I’m Swedish. I’m based in Stockholm. And I was part of the team that took TUI Nordic essentially an offline organization into a fully OTA (online travel bureau). So, the Nordic business of TUI is a hundred percent online, no travel agencies, no absolutely nothing.
Skift: That’s simply tradition, or how did it get to be that way? No travel agencies included?
Ulwahn: I believe it’s been progressing into that way and likewise TUI took leadership to the marketplace, as well. So, the clients were moving online. And we were actually quick in embracing to it, as well. And essentially it drove the strategic decision to go totally online. So, that is already done and dusted in there. So, they are part OTA. They do package tours, they do accommodation just, they do flights.
And when I move to TUI Musement, the trips and activities space, it’s been a similar ride. Which I believe is really exciting. So, when we started in TUI Musement, it was an offline business concentrating on selling with reps. And now with the acquisition of innovation from Musement in Milan, and to where we are today, TUI Musement, the Tours & Activities department, is now 45 percent digital when in 2018 it was 2 percent. So, a big modification in a short time, and we now are absolutely taking the benefits from this.
Skift: And how does that compare to TUI as an entire, the 45 percent? How does that compare to TUI in basic?
Ulwahn: The Nordics are one hundred percent, the UK, most likely 80 percent.]
Skift: I’ve been writing about Expedia. And among their problems, one of their concerns, is all of the businesses are on various tech stacks. So, is that the exact same with TUI due to the fact that you were discussing the Nordics is at one stage, and in the UK, is that another stage? Is that the same kind of concern for you guys?
Ulwahn: They are aligning around the same tech stacks. So, it’s the same aspiration to do that also.
Skift: So Booking Holdings CEO Glenn Fogel has yapped about his push for offering customers with the connected trip.Does TUI, since of all the items you have, already have that?
Ulwahn: We have. So, a big part of what we’re doing right now, for instance, is offering to the two-way bundle consumers. We call it the two-way upsell. So, a customer books a flight, the hotel, and we offer them, them the airport transfer. And either before or in the destinations, we likewise include the activity. We do it through the app. We have the two-way app now, and that’s been one of the larger changes in the change throughout Covid, it’s up practically now to 80 percent. So, individuals are truly utilizing it. So that’s how we use it as a connected trip. We’re now likewise doing the other method around. Now, where we have clients entering either Musement world or into the experience the environment, and they then start with an experience and after that add on the flights and hotels afterwards. Which I think is the brand-new pattern. So, I certainly see the element of the connected journey, and I believe it’s truly powerful going forward.
Skift: So, I’m a TUI client and I purchased a package, right? And my flight is going to be late, or I’m going to need to show up the next day or whatever. I imply, do you let the hotel know, let the customer know? I indicate, are those example integrated?
Ulwahn: Yes. Those are integrated even– I understand why you’re asking this– because we likewise know what an obstacle it is.
Skift: Yes.
Ulwahn: However it is. And I think that is among the big benefits that we can really manage those examples. That’s actually when the linked journeys seem seamless. When it really works like that. So, yes, I believe it’s a big strength.
Skift: So, if I talk to among your customers, among your visitors, would they tell me, “Peter, he might talk like that, but it truly doesn’t take place on the ground.” Would they state that? O would they state, “Hey, guy this, this truly works. It is all linked.”
Ulwahn: I would state– and I would do the popular 99.9 percent thing– it would work due to the fact that we have the devoted 1,000-plus coworkers that make it take place. And I think a large part, we’re doing this manually today. We require to do more automation going forward. However there is a group keeping track of these things and making sure it makes good sense that it works.
Skift: OK, for the very first half of the 2022, TUI Musement lost 25.5 million euros, which was a huge enhancement from the first half of 2021.
Ulwahn: It’s a loss since of the winter season. The winter season in Europe is the low season. And the summer season is the high season, although it’s stabilized with the Caribbean organization, which isn’t totally back. For the European perspective, it has a larger effect. I believe in a regular year with the Caribbean and Asia being back and likewise having the cruise lines, it would be a much better balance. ‘
Skift: Do you expect to get Musement to profitability by the summertime?
Ulwahn: So TUI Musement is in fact rewarding currently. We have the EAT (Excursions, Activities and Tours) service, we have the transfers part, and we likewise have the multi=day trips part, and we sell to TUI and we sell to B2B company. So B2B is cruise lines. B2B is also the OTAs that we have collaboration with, like Booking.com. And we likewise have tour operators TUI is approximately 50 percent and the B2B is roughly half.
Skift: So you are partners with Booking.com and Trivago. What about GetYourGuide and Tripadvisor/Viator? Are they on your wish list?
Ulwahn: I would state, depending on how we look at it. They are competitors and in some respects they could also be consumers. And some elements, they might also be suppliers. So, yeah, depending upon what and how we wish to do it. We are introducing this program now of own item. So, I believe among the distinctions compared to GetYourGuide is since we come from the operators side, that’s our DNA. If you take a look at sun and beach, 66 percent of our items that we sell in fact we operate ourself, which is a difference compared to Viator and GetYourGuide. So because element, we’re more of a product business.
Skift: Provide me an example of a typical trip that you operate.
Ulwahn: I would say all the island tours in Greece, for instance, I think that would be the most visual one. So, a tour consumer or a Booking.com consumer concerned Rhodes. We take them for the big island trip around the island of Rhodes. Well, it’s our own bus. We take them to the restaurant that we have actually done. It’s our own guides. We sell it under the brand name TUI Collections. So it’s developed by us, operated by us, and satisfied by our teams also. And it’s offered to any of the channels.
Skift: GetYourGuide is doing their own trips, too, right?
Ulwahn: I understand that they have actually been experimenting a bit with that, and I presume that is attractive. The reason that we do it is that you capture part of the product margin, obviously. So, that’s how we are profitable because element. So if you manage both part of the item and the circulation, then obviously it is simpler. So, we can see that they’ve been doing some things mainly in cities. We’ve been doing this for a very long time and have a larger space. So, I believe we are 7 times bigger in regards to own items because viewpoint.
Skift: Seven times bigger than Get Your Guide?
Ulwahn: Yes.
Skift: Is the Musement as a brand fading? How do you see that?
Ulwahn: No, the Musement is the brand name for the OTA parts in some nations, the Musement brand name is still really strong. The Musement brand is a circulation brand name and is not in the locations.
Skift: So you’re background is as a product person. Or part of your background. So what sort of new products do you imagine for TUI and TUI Musement?
Ulwahn: I mean, the focus we have on TUI Musement today is to improve the portfolio and specifically under the TUI Collection brand name. So we know for a reality that when consumers enters into the trips and activity area, they must see things. They can accept to have hotel that is OK-ish. But the when in a life time experience needs to be truly excellent. We use a lot of insights, both from the 10 million clients that we have, in terms of item innovation, but likewise the functional data we have. You will hear more from us.