Business

Tui maintains forecast as booking levels surge to near pre-Covid levels

Tui Group nears return to profitability as travel group customer bookings rise to approach pre-Covid levels

  • Tui expects ‘significant positive’ underlying pre-tax profit
  • Average sales prices are about a quarter higher for the winter season
  • The firm revealed that its summer program had gained 12.9 million bookings

Tui Group stuck to its full-year forecast after seeing a major rebound in summer vacation bookings despite continued widespread unrest at European airports.

Europe’s biggest tour operator expects to make a ‘significant positive’ underlying pre-tax profit for the financial year ending September 30, after posting a loss of more than £2billion last year .

The company revealed its summer schedule attracted 12.9 million bookings, just 9% below pre-pandemic volumes, even as flight disruption costs remained at “high levels”.

Popularity: The company revealed its summer schedule drew 12.9 million bookings, just 9% below pre-pandemic volumes

Bookings were at 94% of 2019 levels during the peak holiday months of July and August, with around 5.3 million people traveling with Tui, roughly double the number of travelers during the same period. last year.

Its customers also paid 18% more on average for their holidays, which the company attributed to the popularity of its summer holidays and higher share of package sales.

Meanwhile, average selling prices are currently around a quarter higher for the winter season, but the Anglo-German firm expects the winter program to be “close to normalized pre-Central levels.” pandemic”.

It believes that the Canary Islands and the Caribbean will be particularly popular destinations for its customers, with strong demand also expected in Cape Verde, Mexico and Egypt.

Outgoing chief executive Fritz Joussen and chief financial officer Sebastian Ebel said holidaymakers were increasingly looking for longer holidays with a bigger budget.

“It’s encouraging and shows the current importance of vacations and travel experiences in the post-Corona era,” the couple said.

Tui shares were down 0.5% at 136.3p in early afternoon Tuesday, meaning their value is down more than 35% in the past 12 months.

FTSE 250 activity has been affected by cross-border travel restrictions since March 2020.

Sales picked up as those restrictions eased, but staff shortages at airports over Easter and early summer led to flight delays and cancellations for significant numbers of passengers.

Tui said he would seek compensation from airports for the disruption, which cost him £66m in the last quarter.

The company noted that the disruptions have subsided in recent months, but inflationary pressures in the UK and Europe are expected to hit holiday demand.

Soaring energy prices resulting from the easing of lockdown restrictions and Russia’s full-scale invasion of Ukraine have put a strain on household finances across Europe.

AJ Bell chief investment officer Russ Mold said: ‘TUI suggests Britons are still desperate to go on holiday and are willing to pay higher prices to fly abroad.

‘This resilient market is likely to be tested like never before in the coming months, and while a week in the sun may be a priority right now, there comes a time when it just isn’t affordable, even for middle to high income families. .’

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