Tui returns to profit as holiday bookings and prices surge post-pandemic

Holiday giant Tui Group has seen its revenues quadruple this year and summer bookings almost return to 2019 pre-pandemic levels, following two-and-a-half challenging years for the travel sector.

The company reported revenues of 16.55 billion euros (£14.24 billion) in the year to September 30, up from 4.73 billion (£4.07 billion) the previous year.

It also returned to profit, reporting underlying pre-tax earnings of 409 million euros (£352 million), surging upwards from heavy losses of 2.08 billion euros (£1.79 billion) suffered this time last year.

In its fourth quarter, guest numbers reached 7.4 million – 93% 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 war in Ukraine, and significant airport disruption over the summer.

It said winter bookings in the UK are up 5% on pre-pandemic levels and average prices have surged by 23%, which will help cushion the impact of cost inflation for the business.

Across the group, average prices were 28% 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.

Tui 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.

“We will see more normality compared to last year, where there was a strong increase in duration and a strong increase in star ranking.

“After Covid, people wanted to go on longer holidays and stay in a five-star rather than a four-star hotel. So here, we do expect a normalisation to times pre-Covid.”

Mr Ebel added: “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. All fundamental data point to this, and the long-term megatrends from which our industry particularly benefits remain intact.

“We also expect 2023 to be a solid and good year, but we are very aware of external market factors.

“With our strong brand, resilient business model, increased flexibility and dedicated teams, we are very well-positioned to benefit from market opportunities in the current financial year and beyond.”