Tui Group has achieved its first winter profit, driven by strong bookings and rising average selling prices. Despite market challenges, consumer demand for travel remains robust.
For the quarter ending in December, Tui Group reported record revenues of €4.3 billion, a 15% increase year-on-year. With underlying earnings of €6 million, the company has returned to profitability after a significant loss in the previous year.
Strong Forward Booking Demand
Tui Group has reported a significant rise in forward booking demand, with average selling prices holding steady. This underscores the strong demand for travel products and a continued consumer willingness to prioritise spending on holidays and travel.
The company’s quarterly revenues reached a record €4.3 billion, a 15% increase compared to the previous year. Underlying earnings for the quarter amounted to €6 million, a stark contrast to the €153 million loss reported in the same period last year.
Regional Performance and Customer Numbers
The northern region, including the UK and Ireland, experienced a 7% increase in quarterly revenues, amounting to €1.4 billion. Traditional seasonal losses were reduced by €71.5 million to €50.4 million. This performance was driven by increased demand and higher prices.
Passenger numbers in the northern region rose by 2.7% to 1.2 million in the quarter, reaching pre-pandemic levels. Online and direct distribution channels remained consistent, with online distribution at 68% and direct distribution at 93%.
Summer 2024 and Winter Current Bookings
Summer 2024 bookings are 8% ahead across all source markets with 32% of the programme sold. Key medium- and short-haul destinations like Spain, Greece, and Turkey are particularly popular.
Current winter bookings have also shown an 8% increase, with average selling prices rising by 4%. Popular short- and medium-haul destinations include the Canaries, Egypt, and Cape Verde, while key long-haul destinations feature Mexico, Thailand, and the Dominican Republic.
In the UK, bookings are up by 3% with 41% of the programme sold, indicating a strong recovery and consumer confidence in travel.
Geopolitical Factors and Business Adjustments
Despite geopolitical uncertainties, particularly in the Middle East, Tui Group remains flexible. The company is prepared to adjust capacity from the eastern to western Mediterranean if necessary, depending on regional developments.
The adaptability of Tui Group’s operations ensures that the company can respond quickly to changing circumstances, maintaining customer demand and operational efficiency.
Revenue and Profit Expectations
Tui Group anticipates a 25% year-on-year increase in annual profits, with revenue expected to rise by 10%. This outlook is supported by strong booking demand and effective business strategies.
Chief Executive Sebastian Ebel stated, “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.”
Shareholder Decisions and Listings
At the annual general meeting in Hanover, shareholders will vote on whether to discontinue Tui Group’s dual listing on the Frankfurt and London stock exchanges. The majority of the group’s share transactions take place on the German financial market.
The termination of the London listing could streamline operations, offering advantages for both investors and the company, as noted by Tui Group. This decision requires a 75% majority vote.
Flexibility and Future Growth
Tui Group’s focus on operational excellence, agile and flexible actions, and consistent implementation of strategic programmes is key to future growth. People’s willingness to travel remains high despite a challenging market.
Sebastian Ebel remarked, “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%.”
Tui Group’s performance highlights a resilient travel industry with a positive outlook for future growth. Strong bookings and strategic measures are expected to drive substantial profit and revenue increases.
Chief Executive Sebastian Ebel’s emphasis on transformation and operational excellence underpins the company’s promising trajectory. Tui Group’s adaptability and commitment to customer demand ensure it remains a leading player in the travel sector.
