TUI summer bookings add to signs travel industry is booming despite inflation

TUI chief executive Sebastian Ebel promised "new products, additional customers, and as a result, more market share and above-average growth".

Shares in London-listed TUI, which ended slightly higher in the session, have risen about 7.5% in the past month.

European travel giant TUI has said recent bookings for the upcoming summer are running ahead of pre-pandemic levels, the latest sign that the travel industry is booming despite high inflation sapping consumer spending power.

The world’s biggest tour operator said booking volumes since the start of the year exceeded 2019 levels, led by demand from travellers in Britain and Germany. Prices are also higher than pre-pandemic levels, the company said.

Like the low-cost airlines, Hanover-based 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.

A bumper summer 2023 would help TUI in its long recovery from the pandemic. The company said in December that it would repay its remaining bailout package by means of capital increase. 

Reporting earnings for its first quarter to the end of December, TUI said its losses had narrowed to €153m from €274m in the same quarter a year ago. 

First-quarter revenue rose to €3.8bn ($4bn) from €2.4bn the same time last year. TUI confirmed its full-year guidance for a significant increase in underlying earnings.

Shares in London-listed TUI, which ended slightly higher in the session, have risen about 7.5% in the past month. Some analysts have feared recessionary pressures could dampen demand for holidays, but results for airlines such as Ryanair, Wizz Air, and EasyJet have indicated consumers are gearing up for their holidays. 

Shares in Ryanair ended almost 1% higher in the session, but are down 17% from a year ago. EasyJet shares have climbed in the past month and clawed back some of the hefty declines of the past year, while Wizz Air shares have also gained, but are still sharply lower from a year ago.      

TUI posted 3.3m customers in the first quarter, compared with 2.3m in the 2022 financial year, while upcoming bookings for the 2023 winter and summer seasons hit 8.7m. 

"Our strategy is clear: Quality, cost discipline, and market share," said TUI chief executive Sebastian Ebel. 

"New products, additional customers, and as a result, more market share and above-average growth are the basis for future increases in revenue and earnings."

Irish Examiner, Bloomberg and Reuters