Europe’s largest travel operator TUI has left the container shipping business, setting sights now completely on the tourism industry.
The travel company, whose name is pronounced to rhyme with phooey, and is headquartered in Hanover, Germany, said Monday that it sold its remaining stake in container shipping line Hapag-Lloyd on the open market.
The company has been focusing focused more and more on its travel business as it seeks to become the world’s “leading integrated tourism company,” it said. Through the sale of this stake and previous holdings in the container shipping company, TUI earned €395 million, a spokesperson said.
TUI has been reorganizing and developing its own brand offerings in recent years, aiming to provide a full set of services from booking through on-site services to accommodation in hotels and on cruise ships. At a recent presentation, the company said it would keep building its hotel portfolio by adding up to 45 more hotels as it aims to provide year-round long haul beach holidays. But TUI is playing catch-up, having been slow to respond to the proliferation of online travel sites, and is in danger of being left behind as a lower margin holiday supplier.
Seeking to fight back, TUI recently adopted blockchain technology into its payment systems to make up some of the ground lost, and edge out providers such as Expedia and Booking.com.
In March, the tourism company started selling off its shares in Hapag-Lloyd, Germany’s largest container shipping line. The cash from the sale will be beef up TUI’s tourism business, particularly its own hotel and cruise line brands, and boost its balance sheet. Also, the company said it will buy two cruise ship operations, Mein Schiff 1 and 2, in 2018 and 2019.
The company also held talks about the future of struggling German airline Air Berlin. Etihad Airways, Air Berlin’s biggest shareholder, however, broke off talks with TUIFly about creating a jointly held leisure airline after deeming the deal too risky.
TUI Group, which employs 67,000 people in more than 100 countries, recorded revenues of €17.2 billion and an operating result of €1 billion during fiscal year 2015-2016.
HJ Mai is an editor for Handelsblatt Global.