Diversification and German Tour Operators: The Case of TUI and Coach Tourism

The German tour operator market has been relatively stable and dominated by a few large firms over a long period. This paper examines the attempts of the largest operator (TUI) to move into coach tourism. This move may be considered as diversification and it is examined within that context. The move by TUI was not successful for many reasons including the ability of existing small firms to adapt and survive, and the corresponding inability of the large firm to adapt to the requirements of a market with specific operational and customer characteristics. The skills of operating in the ‘mass’ package tour market were apparently not transferable to this smaller market.