Summer holiday bookings surge at tour operator Tui

Tui said summer bookings were ahead of pre-pandemic levels as travellers shrugged off cost of living concerns to enjoy the first full year of holidays without restrictions.

It carried 3.3mn customers in the first quarter, up by 1mn on a year ago, and almost back to 2019 levels.

Revenue at Tui reached €3.8bn thanks to positive winter and summer bookings in the three months to the end of December. Losses before interest and taxes were €158.7mn, compared with a loss of €271.4mn a year earlier.

“Our strategy is clear: quality, cost discipline and market share,” said Tui’s chief executive Sebastian Ebel. “Booking dynamics for summer 2023 are encouraging,” he said, adding that he expected “underlying earnings to increase significantly” for the year.

The comments came after Tui lost its place as the world’s biggest tour operator to rival Jet2 on Monday.

The Civil Aviation Authority reported that Jet2 had expanded its licensing to provide holidays for 5.9mn people annually, overtaking the 5.3mn that Tui is able to carry.

Even though holiday prices are higher than they were before the pandemic hit, bookings in the past four weeks had exceeded 2019 levels, the company said on Tuesday.

A total of 8.7mn summer and winter bookings were made for this year, with travellers from the UK and Germany leading the resurgence in demand.

Tui’s bullish outlook follows news of strong trading elsewhere in the travel industry. Low-cost airline Ryanair has reported record profitability while easyJet forecast a return to annual profit after three years of losses following “strong and sustained” passenger demand.

Tui said its hotels and resorts business drove revenue growth, supported by record bookings for summer holidays in January. The company’s net debt position was €5.3bn during the quarter.

“The return of restriction-free travel meant demand beat pre-Covid levels in the quarter, signalling that the good times truly are returning for an industry hammered by coronavirus,” said Julie Palmer, partner at restructuring firm Begbies Traynor.

“Losing money over the winter isn’t unusual in the holiday industry, with companies making their money during the peak summer season,” she added.

Analysts at Barclays said “encouragingly, bookings have gathered momentum”, noting that fuel and foreign exchange had led to a larger operating loss than usual.

They said in a note that they expected a wider-than-usual operating loss for the next quarter as well, but added that if the momentum in bookings continued into the summer then expectations would improve.

Shares in the company nudged upwards just over 1 per cent on Tuesday to 173p, an increase of 23 per cent since the start of the year.