Holiday giant TUI confident of having strong summer despite mounting losses

It comes after Ryanair said it was hopeful of a strong summer recovery if no further setbacks occur

TUI said summer holiday bookings have been approaching pre-Covid levels with pent-up demand driving a steady recovery, particularly since the UK lifted restrictions and eased testing rules.

Shares in Europe’s largest holiday provider TUI fell by as much as 4% on the back of industry analysts saying they expect the company’s losses to be larger than expected in the three months to the end of March, which cover the second quarter of its financial year.

TUI reported an underlying operating loss of €274m for its first quarter, covering the three months to the end of December. 

However, the company said it is confident of seeing a recovery later this year, with pent-up consumer demand for holidays set to boost bookings over the key summer season.

TUI said summer holiday bookings have been approaching pre-Covid levels with pent-up demand driving a steady recovery, particularly since the UK lifted restrictions and eased testing rules.

The group - which runs hotels, airlines, cruises and travel agencies - said 3.5 million TUI customers had booked a trip for summer 2022, as of the end of last month. That level is around 72% of the levels seen in the same period in 2019. But new bookings matched pre-crisis levels, it said.

Last month, despite warning of further potential Covid disruptions to air travel, Ryanair said it was hopeful of a strong summer recovery if no further setbacks occur.

Elsewhere, Norwegian Cruise Line Holdings has said it expects to report a net loss until it can resume regular voyages, as the Omicron variant stalls a rebound in a sector ravaged by the pandemic.

Cruising demand was slammed by rising Covid cases during the Delta and Omicron waves as operators had to tweak their itineraries halfway through sailings or cancel trips hours before the start.

Still, the company said it expects to have positive net income on an adjusted basis for the second half of 2022.

- Additional reporting Reuters