Legacy systems maintained by the retired, Tui boss admits

The second in command at world’s largest travel company Tui Travel has conceded that legacy technology systems are the biggest barrier to progress.

The firm’s deputy chief executive Johan Lundgren was speaking in a session on the opening day of the Institute of Travel and Tourism conference in Barbados this week.

He said if he could start Tui from scratch now he would make sure it did not have such problems caused by legacy systems. Some Tui systems are 40 years old, he revealed.

“I would make sure that I never got into that situation because these are systems that are costly to maintain – we have to call people in from retirement.

“Legacy systems like that are clearly a barrier. We are addressing that but it takes money and resources.

“Most businesses are now becoming more technology driven and having an old system does not necessarily help to do that.

“In some areas of Europe we are very well advanced but that’s a project to consolidate the systems across the whole mainstream business.”

Lundgren said despite the firm’s continuing move to sell more of its own exclusive product, third party retailers remained an important channel but ultimately the customer would decide who flourishes.

He claimed that he no longer places a value on the proportion of business he would like to see through various channels.

“For me, that’s absolutely consumer driven.  The consumer will choose the distribution levels each channel deserves.

“Every distribution channel has to earn its own right to get the customers. There are independent travel agencies who do a fantastic job, in other areas we have not seen growth.

“We are moving to exclusive concepts and that’s an easy sell for travel agents. Independents are an important part of our distribution and will remain so.”

Lundgren said in his former market of the Nordics where Tui pioneered the move to online the fastest growing area of the business was now through third parties.

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