Tui sees summer holiday bookings almost back to pre-pandemic levels: reaction

Holiday giant Tui Group has seen its revenues quadruple this year and summer bookings almost return to pre-pandemic levels, following more than two-and-a-half challenging years for the travel sector.

The group reported revenues of €16.55 billion (£14.24bn) for the year to September 30, up from €4.73bn the previous year. It also returned to profit, reporting underlying pre-tax earnings of €409 million (£352m), surging upwards from heavy losses of €2.08bn suffered this time last year. In its fourth quarter, guest numbers reached 7.4 million - 93 per cent of the level reported in the same period in 2019.

The group said it only started operating in a relatively normal environment in recent months due to late lifting of Covid restrictions, the impact of the conflict in Ukraine, and significant airport disruption over the summer. It said winter bookings in the UK are up 5 per cent on pre-pandemic levels and average prices have surged by 23 per cent, which will help cushion the impact of cost inflation for the business. Across the group, average prices were 28 per cent higher than for the winter before Covid.

The business also noted a trend for short-term bookings following the pandemic, signalling that consumers are avoiding booking holidays well in advance due to the uncertainty of international travel. Chief executive Sebastian Ebel said: “People are more cautious where they spend their money. We are finding that people tend to make a decision on the budgets they have. So, if £1,000 is not enough anymore to go to Spain, then they go to Turkey. Or if they decide in winter not to go to the Dominican Republic, then they go to Egypt.

“After two-and-a-half very challenging years in the wake of the global Covid-19 pandemic, the past financial year was marked by a recovery of our business. As a result, we were finally able to report a positive operating result again. Tourism remains a long-term and attractive growth sector.”

Richard Hunter, head of markets at investment platform Interactive Investor, said: “Tui has seen improvements across the board as it continues its recovery following the ravages of the pandemic, but this recovery is something of a marathon and not a sprint. If the direction of fourth quarter trading is to become a trend, the company is well placed to repair some of the damage done to its balance sheet. Indeed, for the year as a whole, net debt has reduced from €5bn to €3.4bn, with background liquidity of €3.7bn, which should provide a buffer in the event of trading difficulties.”

Richard Finch, consumer analyst at Edison Group, highlighted some challenges that still lie ahead, noting: “Shareholders will be keeping a close eye on how Tui and other companies will be impacted by the ongoing industrial action planned by baggage handlers this Christmas and New Year. With Tui and EasyJet warning travellers of major disruption and cancellations, there is a risk that prolonged action may impact the industry as it moves into a new post-pandemic phase of growth.”