Tui Group nears return to profitability as travel group client bookings rise to approach pre-Covid levels
- Tui expects to achieve ‘significant positive’ underlying pre-tax earnings
- Average sale prices are about a quarter higher for the winter season.
- The firm revealed that its summer show had garnered 12.9 million bookings
Tui Group has maintained its annual guidance after seeing a big uptick in summer holiday bookings despite continued widespread turmoil at European airports.
Europe’s largest travel operator expects to post “significant positive” underlying pre-tax profit for the financial year ending September 30, after posting a loss of more than £2bn last year.
The company revealed that its summer schedule had attracted 12.9 million bookings, which was just 9 percent below pre-pandemic volumes, even as flight disruption costs remained at “elevated levels.”
Popularity: The company revealed that its summer schedule had attracted 12.9 million bookings, just 9% below pre-pandemic volumes.
Bookings reached 94% of 2019 levels during the peak holiday months of July and August, with around 5.3 million people traveling with Tui, which is roughly double the number of travelers during the same period of the year. last year.
Its customers also paid 18 percent more on average for their vacations, which the firm attributed to the popularity of its summer vacations and the bulk of packaged products sold.
Meanwhile, average selling prices are currently around a quarter higher for the winter season, but the Anglo-German firm expects the winter schedule to be “close to normal pre-pandemic levels”.
He believes that the Canary Islands and the Caribbean will be particularly popular destinations for his clients, and strong demand is also expected in Cape Verde, Mexico and Egypt.
Outgoing Chief Executive Fritz Joussen and Chief Financial Officer Sebastian Ebel said there has been a growing trend among tourists to seek longer holidays with a bigger budget.
“This is encouraging and shows the ongoing importance of vacations and travel experiences in the post-coronavirus era,” the couple said.
Tui shares fell 0.5 percent to 136.3 pence late on Tuesday, meaning its value has dropped more than 35 percent in the past 12 months.
The FTSE 250 business has been affected by cross-border travel restrictions since March 2020.
Sales have picked up as these restrictions have been eased, but airport staffing shortages during Easter and early summer caused a significant number of passengers to experience flight delays and cancellations.
Tui has said he would seek compensation from the airports for the outage, which cost him £66m over the last quarter.
The company noted that the disruption has calmed down in recent months, but inflationary pressures in the UK and Europe are expected to weigh on holiday demand.
Skyrocketing energy prices as a result of the easing of lockdown restrictions and Russia’s full-scale invasion of Ukraine have put enormous pressure on household finances across Europe.
AJ Bell’s chief investment officer, Russ Mold, said: ‘TUI suggests Brits are still desperate to go on holiday and are willing to pay higher prices to fly abroad.
“That resilient market is likely to be tested like never before in the coming months, and while a week in the sun may be prioritized for now, there comes a point where it’s simply not affordable even for middle-income families to high”. .’