Skift Take

TUI is tapping into the booming African tourism market as it spreads its offerings throughout the continent.

TUI Group’s hotel division, TUI Hotels & Resorts, said on Tuesday it planned to expand its presence in sub-Saharan Africa, a region with significant tourism potential.

The move comes after years of concentrating on North Africa, where TUI boasts a portfolio of 76 hotels. The new push southwards includes eight new hotels planned for Cape Verde, Gambia, Senegal, Tanzania, and Kenya.

TUI’s Local Partnerships

The expansion is meant to serve a range of target groups, such as vacationers looking for more affordable trips to luxury travelers looking for elevated experiences.

The company said it’s “looking forward to contributing to the development of the African hospitality industry and working together with local communities,” but it didn’t go into detail about how those collaborations would happen, other than to call out TUI’s new hotel brand, The Mora, which is debuting in Zanzibar. 

“Our hotel brand TUI Blue, as well as the new brand The Mora, are committed to creating a local touch in their hotel experiences,” a TUI spokesperson said in response to a Skift query. “This can be achieved in many different ways, from local suppliers, e.g. for food-and-beverage, to entertainment from the region or in collaboration with local designers.”

The company says it is collaborating with Sands of Darakasi Resorts Limited to build a TUI Blue hotel in Kenya and that it is looking to partner with other local groups to grow the franchise in the region. 

“Independent hotel owners can benefit from our hotel brands, our expertise in operations, and the digital hotel infrastructure,” said a TUI spokesperson.

In East Africa, TUI focuses primarily on Mauritius, Tanzania, and Kenya.

There are several reasons that tour companies could be drawn to the market now.

“The likely reason that there is greater interest now by TUI in Africa is because [it offers] a low cost for a good product, there’s a greater marketing push from African destination marketing organizations in the European market, and there’s a potential substitution away from perceived risky Middle Eastern destinations because of current conflicts,” said Oliver Martin, Senior Director at Skift Advisory.

The Booming Africa Travel Market

TUI is also tapping into a young market. In 2023, The World Travel and Tourism Council projected that travel and tourism could boost the continent’s economy by $168 billion in the next 10 years.

There is particular potential for internal travel on the continent.

Domestic tourism in South Africa took off in 2023, with overnight trips climbing by 31% for the first four months compared to 2022, and domestic travel spending increasing by 41%.

For now, domestic tourism is essential to the industry’s growth due to high travel costs and poor transportation networks within and between countries. The continent is also experiencing an unprecedented boom in its middle class, with numbers tripling to more than 310 million over the past 30 years.

“The push to market to and engage African nationals is relatively new,” says Martin. He attributes it to COVID, the rising middle class, and how difficult it can be to get visas outside Africa.

“However, Africa is by no means new to the European market,” he adds. “There is a long history of charter and all-inclusive European travel to East Coast Kenya destinations and Tanzania.”

TUI plans on taking advantage of this growing internal market, but also has its eyes on bigger markets. “South Africa and Kenya are strong local markets,” TUI’s spokesperson said. “But of course the hotels will also attract guests from Europe. At the same time, we are increasing our sales activities in Asia, e.g. China.”

Accommodations Sector Stock Index Performance Year-to-Date

What am I looking at? The performance of hotels and short-term rental sector stocks within the ST200. The index includes companies publicly traded across global markets, including international and regional hotel brands, hotel REITs, hotel management companies, alternative accommodations, and timeshares.

The Skift Travel 200 (ST200) combines the financial performance of nearly 200 travel companies worth more than a trillion dollars into a single number. See more hotels and short-term rental financial sector performance.

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Tags: africa, africa tourism, future of lodging, hotel development, tui, tui group, tui travel

Photo credit: Agadir Morocco, where TUI hosts one of its all-inclusive holidays. Source: TUI

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