Tui Group hails strength of bookings with first winter profit

Tui Group achieved a profit for the first time for its quarter ending in December while reporting strong forward booking demand.

Average selling prices continue to hold up well, “highlighting the strong demand for our products and the consumers continued willingness to prioritise spend on travel and holidays,” Europe’s largest travel group said.

Record overall revenues up 15% year-on-year to €4.3 billion were achieved for the three months to December 31, with underlying earnings of €6 million for the first time against a loss of €153 million in the same period a year earlier.     

The group overall handled 6% more customers in the quarter at 3.5 million.

“We continue to monitor developments both in the Middle East and around the Arabian Peninsula,” Tui said.

“We will retain the option to flexibly adjust capacity from the eastern to western Mediterranean should there be a further escalation of the conflict in this region which has a significant and prolonged effect on customer demand.”

Quarterly revenues for Tui’s northern region, including the UK and Ireland, rose 7% year-on-year to reach €1.4 billion, with traditional seasonal losses for the period cut by €71.5 million to €50.4 million.

The performance was “supported by increased demand at increased prices as well as an upside in particular in UK, from the return to normal hedging lines,” Tui reported.

Passenger numbers for the division rose by 2.7% to 1.2 million over the same three months in 2022 “driven by higher demand and returning to pre-pandemic levels”. 

Online distribution continued to be in line with the  period a year earlier at 68%, while direct distribution was maintained at 93%. 

Summer 2024 bookings “continue to be promising” and are 8% ahead across all source markets with 32% of the programme sold.

“We have seen stronger demand year-on-year across all our key medium- and short-haul destinations with Spain, Greece and Turkey again proving to be most popular for the summer season,” Tui reported.

“In UK, which has been on sale for the longest period, bookings are up 3%, with 41% of the programme sold.”

Current winter bookings are also 8% up with average selling prices rising by 4% overall with 87% of the season sold.

“Short- and medium haul destinations such as the Canaries, Egypt and Cape Verde proved again to be the most popular destinations for our customers” Tui added. “Key long-haul destinations in the quarter included Mexico, Thailand and the Dominican Republic.”

The group continues to expect annual profits to rise by 25% year-on-year with revenue up by 10% despite geopolitical uncertainties, especially in the Middle East.

Chief executive Sebastian Ebel said: “We remain on course, transforming the group and growing. The measures we have introduced are taking effect. We are accelerating our transformation quarter by quarter. 

“Operational excellence, agile and flexible actioning and the consistent implementation of our programmes are important. 

“In addition, people’s willingness to travel is still high, despite a market environment that remains challenging. 

“We are thus creating the basis for Tui’s future profitable growth. And it confirms our expectations for the year as a whole. We want to increase revenue by at least 10% and operating earnings by at least 25%.”

Meanwhile, shareholders will decide whether to discontinue a dual listing on both the Frankfurt and London stock exchanges as part of today’s annual general meeting in Hanover. More than three quarters of the group’s share transactions take place on the German financial market.

“The termination of the listing in London would offer understandable advantages for investors and the company,” Tui said as it recommended approval of the switch, which requires a majority 75% vote.

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