Introduction
The economic climate of The TUI Group will be analyzed in this study. One of the primary objectives will be to investigate the company’s micro and macro environments. There will also be a discourse on how the characteristics of the business environment affect the company’s performance and how it reflects on the interaction between the company and its stakeholders and how that will be reflected. There will be information on the consequences of the COVID-19 outbreak on the company’s success, as well as the effects of the government’s recovery plan on the macro environment of the TUI group, as well as a great deal of other information.
Business Overview
The TUI group is a leisure travel and tourism company based in Germany. 1997 marked the beginning of the transition for the TUI group from mining to tourism as their primary business activity. Hanover, in Germany, serves as the company’s headquarters. The TUI Group is a company that specializes in travel and tourism (Tuigroup, 2022). TUI Airways, which also operates as TUI flies the Netherlands and TUI flies Belgium, is a company’s subsidiary. TUI’s product categories include all-inclusive vacation packages, cruise lines, hotels and resorts, and hotel and resort packages. Its total revenue for the year 2021 is estimated to be €4.732 billion, and its operating income for the same year was estimated to be €–2.025 billion, while its net income was estimated to be €–2.481 billion (Tuigroup, 2022). TUI as a group has 50,584 people working for it.
Sector and Market Operation
The TUI Group’s primary business is in the travel and tourism industry; in addition, they offer services in the airline industry. On the other hand, TUI is an active travel company that operates worldwide and welcomes 21 million guests annually (Tuigroup, 2022). Since almost ten years ago, the tourism industry has been able to keep its appeal by growing consistently and at a faster rate than the GDP. This has provided businesses with a stable foundation to build and grow.
Over the next five years, global sales volume for hotels and cruises is expected to increase by more than 4 percent, while growth for destination experiences is expected to reach 7 percent. The macroeconomic fundamentals of the hotel, cruise, and destination experience businesses continue to look quite promising (Tuigroup, 2022). Despite this, their Markets and Airline’s intermediate business is experiencing several structural and cyclical challenges.
Direct and Indirect Competitors
A direct competitor is an organization that operates in the same narrow target market and offers the same services or products as the business in question. There are more direct and indirect competitors for the TUI group. The term “indirect competitors” refers to an organization, such as Thomas Cook India, operates in the same market as other businesses that sell products, services, or brands that are substantially comparable to those offered by the organization, that other business or organization is regarded as an indirect competitor (Tuigroup, 2022). TUI has several direct and indirect competitors, including Transat, Holidaybreak, Sunwing Dart Group, SeaLink Travel Group, lastminute.com, and Flight Centre Travel Group.
Organizational Structure and the Leadership Team
TUI is a publicly-traded company recognized as one of the largest leisure travel companies in the world. The company has operations in more than 180 countries and serves more than 30 million customers across 31 significant source markets (Schaal, 2022). The TUI group can successfully manage their activities with the help of their leadership styles and activities. The company can run their business efficiently thanks to the help of the leadership.
The impacts of the Covid-19 Pandemic on TUI Group’s internal environment.
Value systems, vision, and mission of the company are reflected in the company’s organizational structure, company cultures, and human resource management system, which all contribute to the company’s internal environment. However, the world was in lockdown from 2020 to 2021 because of the time the world was affected by COVID 19, and many countries were in the same situation (Schaal, 2022). Nevertheless, another TUI division was established in the United Kingdom in this instance. This country was in a similar situation at the time, and as a result, the impact was felt internally. Like;
Value System, Mission and Vision
Due to COVID 19, the TUI group had to deal with many problems, such as when the company could not balance its value systems. This indicates that the company cannot manage its activities effectively, which is a significant problem. One of the most important aspects of the business is contained within this component (Tuigroup, 2022). Because the company measures its performances and activities using the guidance provided by its mission and vision statements. However, COVID 19 was issued because the company could not properly maintain its operations, which resulted in the group being negatively impacted.
Organizational Structure and Corporate Cultures
The activities within the company are evenly distributed because of the organizational structure. However, the same problem occurred with COVID 19, and the company could not manage their organizational structure because TUI as a group was having financial difficulties at the time. Additionally, as a result of the COVID 19 outbreak, the group TUI experienced an impact on the culture of their corporate organization.
The UK government’s recovery plan impacts TUI Group’s internal environment
As part of the report of the Global Travel Taskforce, the government of the United Kingdom has committed to releasing a tourism recovery plan for 2021 in November of 2020. In the struggle of the tourism industry to recover from the pandemic caused by the coronavirus COVID-19, the implementation of this strategy marks a significant turning point (Tuigroup, 2022). It will ensure that the tourism industry is in an advantageous position to realize its full potential for contributing to the ambitious long-term growth objective of the government of the United Kingdom.
Due to government support for the UK tourism industry, which has earned at least £25 billion in British government funding, the TUI Group has benefited from the government’s recovery plan. The British government also offers other benefits to the travel industry, including a VAT reduction of £2.5 billion (Tuigroup, 2022). To keep workers in the tourism industry employed, the UK government also offered a furlough program. As a result, the UK government provided a whopping $12 billion to the industry’s businesses (Schaal, 2022). Most employees were covered by the furlough plan, compared to only 30 percent of workers across the board.
The impacts of the UK government’s recovery plan on TUI Group’s microenvironment
TUI Group’s macro-environment is impacted by the UK’s recovery strategy, which includes travel and tourism. The covid-19 epidemic has completely altered the microenvironment. For a business to be successful, the microenvironment in which it operates is critical. As a result of the government of the United Kingdom’s recovery plan, both the TUI Group and the government of the United Kingdom have benefited from the enhanced company setting and infrastructural facilities, both of which have an impact on the TUI Group (Schaal, 2022). Distributors, employees, and a slew of other stakeholders have been affected by COVID-19’s impact on the microenvironment. To counter this, TUI Group’s financial results have improved due to the UK government’s recovery plan, which has the advanced infrastructure, work opportunities, and the government’s furlough program.
The impacts of the Covid-19 Pandemic on TUI Group’s micro-environment.
Although the Covid-19 pandemic has impacted all businesses, the travel and tourism industry has been the most affected. The TUI Group has also been affected by the covid-19 outbreak. The company’s microenvironment is being disrupted by the effects of COVID-19 (Schaal, 2022). The TUI Group’s microenvironment has been disrupted by the impact of COVID-19, which has affected the revenue. The TUI Group has suffered a significant loss of employees and clients, resulting in significant disruptions to its business operations (Tuigroup, 2022). Because of the Covid-19 outbreak, about 9,00,000 vacation reservations with the TUI Group had to be scrapped.
The impacts of STEEPLE factors on TUI Group’s operations
Identifying the company’s macro environment is critical, and the cascade attributes are one of the most effective tools. The macro-environmental issues affecting the TUI Group were determined using the STEEPLE analysis described in the following points (Gangadharan, 2021). First, in today’s world, technology has a significant impact on the business operations of any company. Due to Britain’s technological advancements, several advantages exist for TUI Group, allowing the company to grow and prosper.
Consequently, the social variables studied as part of macro environment analysis are one of the factors that play the most significant role in determining the social aspects of a business organization. In the case of TUI Group, the company’s leaders need to understand society and the environment (Gangadharan, 2021). This indicates that they need to know about leisure interests, attitudes, and education to develop a more effective marketing strategy. In light of the circumstances above, the social aspects of the United Kingdom are advantageous to the corporation, providing it with an edge over its rivals.
Another essential part of the macro environment is the state of the economy. A more favorable economic climate in the United Kingdom benefits TUI Group, impacting the company’s success. The COVID-19 epidemic has affected every country, and the UK economy has also suffered. In addition to environmental considerations, the TUI Group must also consider them (Gangadharan, 2021). When it comes to TUI Group, the environment is a significant influencer and will remain so in the company’s future. In the case of ethical elements, it also affects the commercial performance of the TUI Group. In this instance, the ethical factors of the nation will be advantageous to the enterprise TUI Group. Ethical aspects are also significant macro-environmental factors.
Conclusion
The purpose of this endeavor should be to determine the activities and advancements that are the most significant within each of the subfields. They need to check the connections between the various trends while simultaneously identifying which trends are most likely to significantly affect TUI. These projections should incorporate several alternative hypotheses or potential outcomes about these trends.
Recommendations
During economic hardship, the government should give the TUI group concessions on their billing method to ensure that no significant corporations ever go out of business. In exchange for giving them time to recover and a helping hand, the government might levy a yearly tax on their firm to reimburse the cost. The OECD’s COVID initiative has offered financial assistance to five key industries to reverse this downward trend. Technology investment in the tourism industry, infusions of cash into tourist enterprises and programs for domestic visitors are examples of these industries. Governments must be essential in maintaining political stability, preventing corruption, and constructing sound transportation and communication infrastructure.
References
Schaal, D. (2022). TUI Group’s Largest Shareholder Hit with European Union Sanctions. Skift; skift.com. Web.
Gangadharan, S. (2021). TUI – Analysis and Implications | PDF | Strategic Management | Tourism. Web.
Tuigroup. (2022). Economy. Economy; www.tuigroup.com. Web.