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The travel giant TUI has launched a new offensive in the British market, drawing inspiration from the low-cost airline model of companies like Ryanair. In a strategic move to combat rising travel costs and the loss of budget-conscious customers, TUI has launched a subsidiary specifically designed to offer affordable holidays, separating basic services from optional extras, which will come at an additional cost. Its main competitor is Jet2’s Love Holidays.<\/p>\n
The race to attract budget-conscious tourists has begun, and TUI isn’t the only competitor reacting. Germany’s Alltours has created the subsidiary A&B Kurzfristreisen to attract spontaneous travelers, and last year, by acquiring the Swiss group Hotelplan, Dertour took over the Aschaffenburg-based provider Vtours with a similar objective.<\/p>\n
TUI’s pilot program begins in the UK with the south of Gran Canaria, where TUI has identified a potential market of 13 million customers annually willing to spend a maximum of \u20ac750 per person on their holidays. This initiative responds to TUI’s need to gain market share in the price-conscious traveler segment, a sector in which it has little recognition outside of Germany.<\/p>\n
Sundeals’ model is radically minimalist. A one-week package to Maspalomas, including round-trip flights, for under \u20ac400 exemplifies this approach. However, the base price doesn’t include luxuries: the hotel won’t be a four- or five-star establishment, large luggage on the plane will incur an extra charge, there won’t be a shuttle bus waiting at the airport, and meals, at best, will be limited to breakfast. Anything beyond this basic standard can be booked separately as an extra.<\/p>\n
This separation of services, common in the low-cost airline sector, is now being applied to the package travel business. The TUI name will deliberately remain in the background, appearing, if at all, in the small print on the Sundeals website. To meet different customer needs, a second brand is the best solution. While TUI customers expect a complete package with service and quality, Sundeals targets holidaymakers who only want to pay for what they will actually use.<\/p>\n
This offensive is not only a response to the uncertainty surrounding bookings stemming from the Middle East conflict or the war in Ukraine, but also a tactical move in a rapidly evolving British market. TUI, the market leader in Germany and Europe, has lost its dominant position in the UK to Jet2, an airline specializing in selling low-cost, self-organized packages. Other competitors, such as Love Holidays, with its aggressive pricing strategy, and EasyJet’s travel subsidiary, have also climbed the ranks in the UK.<\/p>\n
Ltur, TUI’s German subsidiary specializing in last-minute travel, has been instrumental in the development of Sundeals, contributing its expertise in creating deals and its IT technology. Although TUI didn’t venture to export the Ltur brand to England, the business model is the same. In Germany, Austria, France, and Switzerland, the brand will remain Ltur, as it, unlike Sundeals, also operates through physical travel agencies and its own stores.<\/p>\n
This shift towards budget tourism marks a turning point after years in which travel providers had tried to raise the profile of package holidays with higher-quality accommodations and their own brand hotels. While this attracted customers with greater purchasing power, it also made travel more expensive overall. Now, the trend is reversing. After years of increased early bookings, last-minute bookings are gaining ground again. As early as 2025, the number of vacationers postponing their bookings in anticipation of discounts increased, and in 2026, due to the economic crisis, the same pattern was repeated.<\/p>\n
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