Why cloudy days are good news for TUI and Booking.com

Booking a holiday has never been easier. With a single online platform, a seven-night stay at an all-inclusive resort, flights, car rental, airport transfers, insurance, and day trips can all be arranged in one sitting.

This convenience for consumers, however, has required a heavy focus on digital transformation for travel firms, based around a relentless optimisation of their omnichannel operations.

Summer peaks and winter retreats necessitate tailored websites that align with seasonal trends, and offering the best possible flight and accommodation combinations remains a continual goal.

Moreover, the race to be at the cutting edge of technology is fiercely competitive. Consider the case of Airbnb, which entered the market and established such dominance in the rental sector that the brand has become a part of our vocation vocab.

In this context, opportunities abound in the cloud. These platforms can help firms to scale their technology stacks, adjust storage capacity according to seasonal demands, and harness enhanced computing power for more disruptive technologies.

For industry leaders such as TUI Group and Booking.com, the adoption of cloud technology has brought tangible benefits to their operations.

Moving to the cloud

Ray Siripan, global enterprise cloud architect at TUI Group explains that the firm has moved on from its cloud adoption phase and is now in an “innovation phase”.

“We started moving to the cloud seven years ago, and at that time we picked easy workloads within the UK to migrate to the cloud,” he tells TI.

Initially, the German leisure and travel firm built its foundations and trained its IT teams to support the shift to the cloud. As Covid grounded its fleet of planes, TUI accelerated its transition to AWS, completing the move within two years.

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It still runs a hybrid operation, with storage both on-prem and off-prem. Sensitive information is housed within private storage facilities in order to have complete control over the security of the hardware and software.

“TUI is a very asset-rich company,” says Siripan. Alongside “five airlines spread across 150 aircraft”, it also has over 400 hotels, and 16 cruise liners, as well as tour operators, travel agencies, and online portals.

“So, we cannot just have everything in the cloud because of the safety of our customer information,” he adds.

Booking.com also operates a hybrid approach, according to the firm’s senior engineering manager Lee Jarvis. Although it favours a public cloud infrastructure, workloads within compliance and regulatory environments are stored privately.

The digital travel agency hosts over 29 million accommodation listings and flight destinations across more than 55 countries, managing upwards of 150 petabytes of data. Initially, Booking.com managed its technology stack through on-premises data centres, but subsequently transitioned to AWS’s cloud services.

Having evolved from a modest startup in the Netherlands, Booking.com is now one of the largest online travel platforms, and Jarvis notes that the move to the public cloud is facilitating the firm’s ongoing expansion.

Monitoring the expense

While demand for cloud increases, there is a hefty price to pay for anticipated benefits, says Siripan.

“Cloud is not cheap,” says Siripan. “We have several data centres, and when you look at the cost of qualitative cloud you need to look at the lifecycle of the hardware.”

Booking.com also uses visibility tools to analyse its operational expenses, in the same vein as Booking.com which takes on observability to monitor spending across its cloud too.

“We brought in observability tooling and developed in-house tooling that notifies people when they’re approaching their forecast budgets with actions on how to reduce that,” says Jarvis.

On top of this, TUI’s Siripan says that the biggest cost for the firm was upskilling its 1,500 IT staff, spread over 12 countries, to learn how to operate in the cloud safely and effectively.

“The trade-off depends on the workload and if it makes sense to go the cloud. At the end of the day, the cost of IT cannot be higher than the product that we sell.”

According to the World Economic Forum’s Digital Transformation Initiative, from 2016 to 2025, digitalization in aviation, travel and tourism is expected to create up to $305 billion in value through increased profitability.

Therefore, despite the fee, it’s evident that the return on investment is there: “We’re not doing cloud for cost,” says Jarvis. “We’re doing it to move faster.”

Silver linings

The innovation phase for TUI is in full force, thanks to cloud support, says Siripan. “The benefit is enormous,” he enthuses. “It helps our business become competitive.”

During peak booking season, TUI’s online operations handle nearly 60 billion searches, serve 400 million product combinations, and update 8 million prices per hour.

With cloud, TUI can deliver updates faster while reducing the time it takes to introduce new features to its platforms, allowing it to scale further and help its teams experiment with innovation.

Likewise, Jarvis adds that the travel industry is changing drastically.

“Innovations need to be fast,” he says. “Booking.com has a strong market position, but so was BlackBerry at one point, and now it’s all about the iPhone.”

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Public cloud storage can also help travel companies such as TUI and Booking.com scale up and down seasonally.

Jarvis explains that during Covid, this was especially favourable to help Booking.com control its operational costs when travel took a dramatic hit.

“We still had to carry lots of operational costs,” says Jarvis. “Customer behaviours do change, and we have to respond.”

“It’s very seasonal. So, to be able to scale up and down and not waste resources is probably a really big unique selling point of cloud.”