TUI AG said summer bookings are approaching pre-COVID-19 pandemic levels, the latest sign that the travel sector is recovering, despite high inflation squeezing household budgets.
The world’s biggest tour operator said booking volumes were at 96 percent of 2019 levels, led by demand for travel to Spain, Greece and Turkey.
Prices are 26 percent higher than pre-pandemic levels, the company said.
Photo: Reuters
“Strong booking development and significantly improved quarterly figures underline our expectations: It will be a strong summer and a good financial year 2023, with a significantly higher operating result,” TUI chief executive officer Sebastian Ebel said in an earnings statement.
TUI, based in Hannover, Germany, received 4.2 billion euros (US$4.6 billion) in state bailouts in 2020 after the COVID-19 crisis punctured a decades-long boom in travel.
The company last month made its final repayment of its assistance package after a capital increase of 1.8 billion euros.
Europeans’ thirst for travel is driving TUI’s recovery. While household energy and food bills have surged in the wake of Russia’s invasion of Ukraine, consumers are still willing to spend on vacations, despite the higher cost of accommodation and flights.
In the fiscal second quarter ending March 31, TUI’s loss narrowed to 242.2 million euros from 329.9 million euros a year earlier.
Analysts had estimated a loss of 228 million euros.
TUI confirmed its full-year guidance for a significant increase in underlying earnings.
Revenue rose to 3.2 billion euros from 2.1 billion euros.
The company said it had secured 8.3 million bookings to date for the summer, and that 55 percent of the program for the season had been sold, which TUI called “broadly in line” with the same season in 2019.
“Outlook commentary is encouraging, with summer ’23 booking close to pre-pandemic levels and pricing strong,” Jefferies International analyst James Wheatcroft wrote in a note.
Like low-cost airlines, TUI is seeking to increase its market share as higher household bills weigh on consumer spending, pushing people toward package holidays that include flights, accommodation, bus transfers and food, and helping them to control the cost of their trip.
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