TUI Musement emerges as an actor of tours and activities in Europe in Shadow of GetYourGuide

What happens when a former tour operator, based in Germany TUI Group, acquires a tours and activities startup based in Milan, Fun, and trying to gain digital street credibility in growing the business?

The result is TUI Musement, renamed TUI Destinations in September, and has become an important, if not unrecognized, European player in tours and activities, although not necessarily a thorn in the side for the well-funded European market leader. GetYourGuide.

In his first interview since the rebranding and the first in-depth conversation with the press since becoming CEO of TUI’s Tours and Activities business unit in April 2018, David Schelp believes the brand is not getting its due. .

“Only a few people have us on their radar,” Schelp told Skift. “We are a relevant player in circuits and activities.

Acquired by TUI in September 2018, Musement generated the following year 1.23 billion euros (approximately $ 1.48 billion) in gross annual revenue from tours and activities. This was a 105% jump from the previous year, when Musement was still independent.

Perhaps the only tour and activity company to release financial data, TUI Musement made a profit of 56 million euros ($ 67.3 million) before interest and taxes in 2019, a jump of 21 , 7% compared to the previous year. As everyone’s business in pandemic-strewn 2020, the pre-pandemic 2019 numbers are probably the most relevant.

Tripadvisor combines experiences with meals and Airbnb combines experiences with stays, so it’s very difficult to compare finances with TUI Musement.

How to see TUI Musement

“As GetYourGuide dominates many titles with its impressive fundraising and growth, Musement has emerged as a significant player in the industry,” said Arrival co-founder and CEO Douglas Quinby, referring to Europe. “While innovative startups often suffer when acquired by large bureaucratic organizations, TUI and Musement have defied the odds and skeptics by embracing and driving digital transformation within the TUI Destination Experiences division. “

GetYourGuide has attracted some $ 790 million in funding.

Schelp characterizes its TUI Musement as more like Tripadvisor / Viator, as the two have substantial business-to-business partnerships, and less like Berlin and Hong Kong-based GetYourGuide. Klook, two widely funded startups that lean heavily towards a business-consumer orientation.

When it comes to its tours and activities offering, which numbered 168,000 as of September 30, Schelp puts TUI Musement in the “middle” between Tripadvisor / Viator at the top end and GetYourGuide at a lower rung.

TUI Musement markets TUI’s 21 million annual customers, most of whom purchase vacation packages, and had a total of 10 million tour and activity customers in 2019. Of the 10 million, 3 million participated in excursions ashore by cruise lines offered by Carnival. and Royal Caribbean under their own brands, and 1.2 million TUI Musement customers have booked their own TUI collections, which have parallels with GetYourGuide Originals.

While organizing your own tours and avoiding paying operator commission seems like the holy grail for companies like TUI Musement, Schelp said TUI Collections, which had around 260 activities in 2019, is not a top priority. Indeed, although TUI Collections may be a higher margin business than a tour managed by a partner, it can represent a risk for the brand and be difficult if the load factors are not optimal.

Business-to-business side, TUI Musement now feeds the attractions tab of Booking.com because the partnership has been deployed in recent months in some 150 cities on “all continents”, according to Schelp. While Booking.com is free to offer all TUI Musement attractions, so far it does not offer TUI Collections branded attractions or that come under partner brands, as is the case with several cruise lines.

Schelp said he does not view Booking.com as a competitor.

Where does Airbnb fit in?

While TUI Musement has made progress, GetYourGuide is based in Amsterdam Tiqets, which saw Airbnb lead a $ 60 million funding round in 2019 and has been aggressive in signing deals with destinations and attractions, as a competitive threat.

Interestingly, Airbnb, which has declined to offer attraction tickets, is a prominent investor in attraction-focused Tiqets. Airbnb therefore has a potential entry point into attraction tickets if it decides to activate them. Tiqets founder and chairman Luuc Elzinga declined to comment on Airbnb.

Commenting on Airbnb’s highly organized experiences activity, with a focus on guest visits, Schelp said, “Peer-to-peer experiences are hard to produce, I would say.”

But he wouldn’t rule out Airbnb potentially running a viable tours and activities business.

“They might have a formula for getting it right,” Schelp said.

When asked if he had ever spoken to Airbnb about a partnership, Schelp declined to respond specifically, but said, “We talk to a lot of companies about partnering and doing things together.”

The European market for tours and activities is highly fragmented. If TUI Musement is sometimes forgotten, the same goes for certain regional or national players, including French Ceetiz, Spain Civitatis, and Jochen Schweizer Mydays Group in Germany.

Consolidation to come

The partnership side of TUI Musement seems to be the fastest growing part of the business. Schelp said TUI Musement is focused on organic growth, but he knows consolidation will eventually settle in the space of visits and activities in the post-pandemic exit and beyond.

TUI could be a buyer when this happens.

TUI Musement, which has 70 active direct integrations with sites, operators, and touring software vendors including FareHarbor, Bokun, Rezdy, and BookingKit, would likely not have purchased a software vendor on its list of tasks, said Schelp. Tripadvisor and Booking Holdings have made high-profile acquisitions of these software services in Bokun and FareHarbor, respectively, in recent years.

With the current strength of Europe, the Mediterranean and North Africa, followed by the Caribbean, the United States and Canada, TUI would likely consider acquisitions in Europe and the Americas to expand its base, then consider expansion into other regions.

“We are ready to grow as soon as the market returns,” said Schelp, adding “I also wouldn’t rule out acquisitions if the right thing comes along.”

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