Tui Group has upheld its annual guidance after seeing a major rebound in summer holiday bookings despite continued widespread turmoil across European airports.
Europe’s biggest travel operator expects to achieve ‘significant positive’ pre-tax underlying earnings for the financial year ending 30 September, after posting a loss of more than £2billion last year.
The company revealed that its summer programme had attracted 12.9 million bookings, which was just 9 per cent below pre-pandemic volumes, even as it flight disruption costs remained at ‘elevated levels’.
Popularity: The company revealed that its summer programme had attracted 12.9 million bookings, which was just 9 per cent below pre-pandemic volumes
Bookings were at 94 per cent of 2019 levels during the peak holiday months of July and August, with about 5.3 million people traveling with Tui, which is roughly double the number of travelers during the same period last year.
Its customers also paid 18 per cent more on average for their holiday, which the firm attributed to the popularity of its summer holidays and the greater share of package products sold.
Meanwhile, average selling prices are currently around a quarter higher for the winter season, but the Anglo-German firm expects the winter programme to be ‘close to normalised pre-pandemic levels’.
It believes 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.
Departing chief executive Fritz Joussen and finance boss Sebastian Ebel said there had been a growing trend among holidaymakers to seek out longer holidays with a larger budget.
‘This is encouraging and shows the current importance of holidays and travel experiences in the post-Corona era,’ the pair said.
Tui shares were down 0.5 per cent to 136.3p during the early afternoon on Tuesday, meaning their value has declined by over 35 per cent in the past 12 months.
The FTSE 250 business has been affected by cross-border travel restrictions since March 2020.
Sales have revived as these curbs were loosened, but staff shortages across airports during Easter and early summer led to a significant number of passengers experiencing delays and flight cancellations.
Tui has said it would be seeking compensation from airports for the disruption, which cost it £66million during the last quarter.
The company noted that disruption has calmed in recent months, yet inflationary pressures in the UK and Europe are expected to hit demand for holidays.
Skyrocketing energy prices resulting from the loosening of lockdown restrictions and Russia’s full-scale invasion of Ukraine have put a massive squeeze on household finances across Europe.
AJ Bell investment director Russ Mould said: ‘TUI suggests Britons are still desperate to go on holiday and that they are willing to pay higher prices to jet off abroad.
‘That resilient market is likely to be tested like never before in the coming months, and while a week in the sun may be being prioritised for now, there comes a point where it’s just not affordable even for middle-to-higher-income families.’
