Tui chief warns of ‘more challenging’ months ahead

Tui chief executive Sebastian Ebel has warned consumer demand could become “more challenging” this winter despite reporting strong summer bookings last week.

Ebel suggested the “customer climate” this winter “may not give us a tailwind” and admitted: “I’m surprised the market is so strong.”

He said “the consumer environment becomes more challenging” and warned: “The market could have its challenges.

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“I would assume we won’t see a tailwind in any European markets [this winter]. The customer climate could slow.”

Ebel added: “We see positive numbers from the UK, [but] it’s good to be more conservative when capacity planning rather than too aggressive.”

Yet he insisted: “We’re very optimistic for winter.”

Speaking as the Tui Group reported third-quarter results for the three months to the end of June last week, Ebel also noted long-haul bookings this summer remain down on 2019 levels, suggesting this was “most probably due to cost increases”.

He reported summer 2023 bookings up 6% year on year across the group and prices up 7% on average, with bookings at 95% of the 2019 level.

Ebel explained “the missing 5%” of bookings compared with 2019 “is mainly in long haul, a segment that is still weak”.

He also noted “a small shift” in package-holiday clients who “seem to spend less in destination” on booking excursions and activities with Tui Musement.

However, Ebel added: “Tui Musement is growing [and] a broader [product] offering more than compensates.”

He reported Tui UK passenger bookings up 1% year on year and the German market up 11% with 86% of capacity for this summer sold and insisted: “Summer bookings remain strong [despite] a small slip during the wildfires [on Rhodes].

“Winter bookings are very strong on volume and especially on margin, despite that the customer climate may not give us a tailwind.”

However, Ebel argued: “In some markets we still have significant potential to perform better. Dynamic packaging should lead to a significant improvement in results even if the consumer environment becomes more challenging.”

He highlighted Tui’s priorities as “to grow market share”, introduce new products and attract new customers, with Tui’s dynamic packaging platform to be extended across all markets, and said: “We have a clear strategy to capture future market growth.”

Tui returned to profit for the first time since the pandemic in the three months to June, recording a pre-tax profit of €47 million in a sharp turnaround from the group’s €602 million loss in the same quarter last year.

Ebel also reported “a huge improvement” following the disruption to flights last summer, saying: “Disruption is at the lowest level I can ever remember In Germany. In the UK, we’re also performing very well.

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