TUI is looking for bargain hunters: holidays that everyone can afford, according to a cheap airline recipe

TUI has launched a new campaign targeting budget-conscious travelers with a week-long holiday on Tenerife including flights for under 400 euros. The travel company aims to attract cost-sensitive customers who prioritize affordability over luxury. This initiative marks a strategic shift towards catering to a segment of the market that has become increasingly price-sensitive in recent years. The move comes amid growing competition from low-cost airlines and new entrants in the travel sector. The strategy begins in Britain, where TUI has introduced the brand Sundeals, focusing on offering packages within a budget of up to 750 euros per person annually. The company estimates there is potential to reach around 13 million such customers across Europe. Beate Einhäuser, head of the German TUI subsidiary Ltur, explains that TUI is underrepresented outside Germany in the budget traveler segment, despite existing growth opportunities. She notes that while Ltur serves primarily last-minute bookers in Germany, the British market required a different approach, leading to the creation of Sundeals. The name TUI remains less prominent in this new venture. While Ltur, based in Rastatt, does not prominently highlight its association with the TUI group, the British version takes a more radical approach. On the Sundeals website, users must navigate extensively to recognize that they are part of TUI. Einhäuser states that maintaining separate brands allows TUI to cater to diverse customer needs effectively. She emphasizes that TUI customers expect service and quality within a comprehensive package, whereas Sundeals targets travelers seeking value for money, akin to the model of low-cost airlines. This strategy mirrors the tactics of budget airlines, offering a basic level of service with optional extras available at additional costs. For instance, the 400-euro package includes a hotel without four or five-star ratings, excludes large luggage allowances, and does not provide airport transfers or meals beyond breakfast. Additional services can be booked separately. This approach reflects a broader trend in the industry, where traditional providers face pressure from newer, more agile competitors. Behind this initiative lies more than just a response to reduced bookings following the start of the Middle East conflict. The British travel market is undergoing a transformation, with TUI losing its top position to companies like Jet 2, which specializes in highly targeted package deals. Other newcomers such as Love Holidays and the travel division of Easyjet have also gained traction. These developments challenge traditional players, forcing them to adapt or risk losing market share. Despite these challenges, TUI has managed to maintain a foothold in the British market, even as rivals like Thomas Cook have collapsed into bankruptcy. However, the rise of new entrants continues to pose a threat to established firms. Recent efforts to recover from booking declines caused by the Iran crisis have shown some success in Germany, but the situation remains uncertain in Britain. As the travel landscape evolves, TUI's new approach represents both an adaptation and a bold step into uncharted territory.