TUI launches Sundeals to take on low-cost travel

TUI has stepped into the low-cost travel niche with the launch of Sundeals, a brand built for price-sensitive British customers. The offer is already out there, based on three-star hotels and cheaper properties within its program. As Hosteltur reports, the German group wants to win over travelers who might not have considered TUI for their beach holidays before.

The interesting part is not that a cheap brand exists, but that TUI, a giant of the traditional tour operator model, is the one launching it. My take: they are reacting to the pressure from low-cost OTAs and aggressive deal aggregators. Sundeals does not cannibalize their premium portfolio, it targets a different audience. The challenge is to keep the brand from getting diluted and to make sure the 3-star experience does not wreck the trust TUI has built over the years. I see this as a smart play, but it is a knife fight: either they scale in volume, or the per-booking margin will be razor thin.

And here is the door it opens: if Sundeals works in the UK, the model can travel to other source markets. If it does not, at least we will know how far the low-cost traveler is willing to go while still wanting the safety net of a big brand.