Tui Travel
TUI Travel PLC
Market overview
2 business models: individualization and commoditization (best serve to changing needs).
But How Does a Service Become a Commodity?
Traditionally, services cannot be commoditized, as there are numerous variables that account for differences between the type and level of service offered by each provider.
The commoditization of hotels started many years ago with the first rating systems. Companies like the American Automobile Association (AAA) and Mobil (now Forbes) ranked hotels into groups rated 1-5 diamonds and 1-5 stars respectively. Each of these categories defined a standard of quality and set of amenities. With these ratings in hand, the consumer could now make a selection based upon the criteria they were interested in. So, without knowing anything about the brand or hotel name, a consumer seeking 4-star or 4-diamond quality could shop this group on the basis of price for any given location, knowing that the service offerings would be at least in keeping with the standard.
‘’In effect, the OTAs have positioned themselves as a service, with hotels as their commodity. It's an eye-opening realization and a battle-cry for change.’’
Key trends & future outlook Online accommodation has seen tremendous growth over the last few years, fuelled by the growth in online bookings and supplemented by strong demand from the emerging markets. Online accommodation, therefore, remains a key area of focus for TUI Travel where we look to consolidate our leadership position within the accommodation wholesaler market and build on our strong position in the accommodation OTA segment.
Business model
Strategy
Competitors ompetitors | Kuoni Travel Holding Ltd. | Thomas Cook Group plc | Travelport Limited |
Porter
So in many companies, strategy is built around the value proposition, which is the demand side of the equation. But a robust strategy requires a tailored value chain—it's about the supply side as well, the unique
Market overview
2 business models: individualization and commoditization (best serve to changing needs).
But How Does a Service Become a Commodity?
Traditionally, services cannot be commoditized, as there are numerous variables that account for differences between the type and level of service offered by each provider.
The commoditization of hotels started many years ago with the first rating systems. Companies like the American Automobile Association (AAA) and Mobil (now Forbes) ranked hotels into groups rated 1-5 diamonds and 1-5 stars respectively. Each of these categories defined a standard of quality and set of amenities. With these ratings in hand, the consumer could now make a selection based upon the criteria they were interested in. So, without knowing anything about the brand or hotel name, a consumer seeking 4-star or 4-diamond quality could shop this group on the basis of price for any given location, knowing that the service offerings would be at least in keeping with the standard.
‘’In effect, the OTAs have positioned themselves as a service, with hotels as their commodity. It's an eye-opening realization and a battle-cry for change.’’
Key trends & future outlook Online accommodation has seen tremendous growth over the last few years, fuelled by the growth in online bookings and supplemented by strong demand from the emerging markets. Online accommodation, therefore, remains a key area of focus for TUI Travel where we look to consolidate our leadership position within the accommodation wholesaler market and build on our strong position in the accommodation OTA segment.
Business model
Strategy
Competitors ompetitors | Kuoni Travel Holding Ltd. | Thomas Cook Group plc | Travelport Limited |
Porter
So in many companies, strategy is built around the value proposition, which is the demand side of the equation. But a robust strategy requires a tailored value chain—it's about the supply side as well, the unique