When borders and airspaces shut up shop, global travel and tourism company, TUI, could have made the same moves as many other businesses – reduce expenses, shut down operations, and hibernate through the long pandemic-winter.
Instead, TUI decided to keep its eyes on the future, shift to the cloud and enable AI implementation, with a mission to redefine personalized travel experiences through a warmer approach. Speaking with Pieter Jordaan, Group CIO at TUI, ERP Today hears of the firm’s journey to TUI’s technology destination.
Pandemic consolidation
Having grown from acquisitions, TUI comprises tour operators, travel agencies, online portals, five airlines, over 400 hotels, and 17 cruise liners, and the company was already on a journey to consolidate its technology operations by region.
People with AI will outperform people without AI.”
One of the biggest struggles for TUI had always been the fluctuation and seasonality of bookings, typically selling 70 percent of summer season bookings within a space of six weeks. During peak season, the group’s online operations handle nearly 60 billion searches, 400 million product combinations, and update eight million prices per hour. The rest of the time, data sat in centers often unused, plus for any extraordinary events, such as an airline going bust, TUI would have to struggle to make up those percent volumes and the experience of its 60 million customers per year could be impacted negatively in the course.
With the pandemic, TUI instead gleaned the opportunity to address some of its difficult areas that typically would be very resistant to change.
Jordaan explains: “What really helped was the risk appetite in the business during that time was very high. You went from the business that says, ‘We don’t want to change so don’t touch our systems because it keeps our planes in the air’ to ‘Change now please because my plane is not in the air’. We had a window of opportunity and that shifted the focus to what systems you will move and how fast you will move them.
“To really have the flexibility and scalability, Amazon was the only choice,” Jordaan continues. “What we did was to take probably the biggest problem we had, our complicated stack – that everyone said we’ll never run on Amazon – and say ‘Well, we just have to do it’.”
TUI stopped all multi-cloud stacks, moving them over 30 different ecosystems to AWS.”
To get the highest-level of service possible to build greater capability, TUI decided to stop all multi-cloud stacks and, having been an AWS customer in some regions already, move its stack across over 30 different ecosystems to AWS, net new.
“Instead of what you get with multi-cloud setups, we could immediately start to use serverless, we could use the highest-level AI services. That actually ended up becoming our new migration plan, which was much faster to deliver certain capabilities than if we would lift and shift it.”
With the window of opportunity unknown, TUI pushed a rigorous five-month timeline, despite engineers originally quoting 2.5 years, and achieved the project in six months. This included the significant reengineering that had to happen for the software and the infrastructure to run in the cloud.
Moreover, delivering the IT organization to a globally distributed workforce, TUI began the task of training its IT staff on AWS skills, and now having completed this for 90 percent of its workforce, is currently training them on generative AI.
Scaling up and down on a whim
Most importantly, the technology shift has allowed TUI to scale its operations up and down as needed. Beyond helping to handle the industry’s seasonality, it was ideal timing as, soon after, there was another major event where a competitor moved out of the industry, and TUI immediately saw a 300 percent volume increase in bookings. With AWS in place across the board, TUI could scale within minutes to meet the demand.
Jordaan retells: “At that stage, our CEO came to me and he says, ‘I never understood cloud. Now I do’, and I think that’s probably the hardest part is to get the executives to understand the benefits of it because there are upfront migration costs with it.”
For Jordaan, the cloud-native platform has allowed TUI “to accelerate data consolidation, drive efficiency, and rapidly embrace AI as a dimension on the scene to enrich the customers’ experience, personalizing from inspiration to destination.”
AI content creation and a warmer customer experience
With the cloud foundations in place, last year, TUI was able to launch an AI Lab to drive generative AI adoption throughout the company, and now produces hundreds of use cases all the way from the board level to the people meeting the customer in the resort.
I see a world where people will do harder and more complicated tasks, and actually build better things.”
The main goal was to be able to build, test, deploy and measure AI solutions as quickly and successfully as possible, while having and monitoring a secure, cost-controlled, well-governed environment to create new AI solutions, and the tools to train and educate the team.
TUI chose to implement Amazon SageMaker, the cloud-based machine learning platform for creating, testing and deploying ML models, and since has increased model deployment by 1,000 percent within one year.
Also, in what Jordaan terms an “enterprise-ready platform to scale generative AI to all parts of the organization,” TUI has opted for Amazon Bedrock as its fully managed, serverless AI service. It has enabled access to a choice of foundational models from companies such as AI21 Labs, Anthropic, Cohere, Meta and so on, as well as a capability set to build generative AI applications.
Its first uses have been leveraging the models Lamba 2 for generating hotel descriptions and Claude 2 for formatting output, enabling TUI to reduce content generation time from eight hours to under ten seconds, all while maintaining quality standards.
Elsewhere, by migrating all its call centers globally to Amazon Connect, AWS’ AI-powered contact center, TUI has reduced agent handling time by 20 percent, helping more customers resolve their queries faster.
Rather than replacing staff with AI, TUI has prioritized reskilling them with AWS, allowing its teams to complete more complex tasks with cleverer enterprise tools.
Jordaan says: “We’re a big company of 60,000 people. I say always, people with AI will outperform people without AI. I see it as an augmentation of task and elevation of what we as humans will be able to do. I don’t see a world where we’ll get rid of people. I see a world where people will do harder and more complicated tasks, and we will innovate and actually build better things […] and that curve of innovation will just continue to grow exponentially.”
Your next booking just got more inTUItive
With AI and cloud technology powering the team, TUI is now creating automated, quality content to display and message to customers via websites, chatbots and many other interactions across their experiential journey.
People will go for an experience and the transactional part will just be a byproduct, not the other way around.”
For the travel firm’s CIO, it’s just the start, and presents further opportunities to reinvent the way people book travel, placing transactional bookings on the back burner and using data more effectively to bring a more personable and intuitive approach to customer experiences.
“That’s why I’m very optimistic about generative AI. We can start to use it in not just an inspirational creative way, but legitimately use the facts that people have experienced already and inspire people,” says Jordaan. “We have applied rating systems that are very crude; three, four, or five-star, but it doesn’t tell you anything. Really underneath the five star, you may have millions of parameters that will be different for you as a user.
“I see the future of travel significantly changed, because you will be able to access that, expose it, use it, transform it, and people will go for an experience and the transactional part will just be a byproduct, not the other way around.”
By having full oversight of the end-to-end experience, TUI is in a prime position to improve it, explains Jordaan. He says: “When looking to innovate on the airplane you can suggest ‘Okay, what’s your baggage allowance?’ We can know your experience in the shop and then compensate for it on the plane, or if your plane was late, compensate for it at the hotel. We can have a long-running transaction with you all the way through your journey and back, which I think makes us unique in this space. That’s what I’m super excited about.”
Next up, TUI is rolling out Amazon Q developer, the AI coding assistant, to 2000 of its in-house engineers to improve deployment efficiency. With new models and capabilities released on AWS Bedrock ongoing, TUI is able to continue to evolve its understanding and use cases of AI, moving quickly to make the most of what’s on offer and sticking with a partner that provides ongoing development for the long-term.
The upgrade is showing rewards for the firm, maintaining profits and customers, with over four percent more guests traveling with TUI and revenue increasing nine percent for the quarter in TUI’s latest 2024 financial results.
Whether in a pandemic, an industry change, or a technology revolution, TUI is sticking to its mission with AWS – not only taking customers to warmer places but aiming to deliver a warmer approach too, from first click to final landing and beyond.
