Travel: Tui continues to benefit from wanderlust

Customers’ desire to travel continues to give Tui a tailwind: the hotel business with brands such as Riu, Tui Blue and Robinson has recently increased significantly and cruises remain in demand, which also allows for higher prices. The average price recently rose by three percent, according to the company. This puts the price development slightly below the plus four percent that was still being talked about in May.

Short- and medium-haul destinations are currently in particular demand, especially in Spain, Greece and Turkey, it said. A total of 5.8 million guests travelled with Tui in the third business quarter up to the end of June – four percent more than a year ago. All in all, the company exceeded analysts’ sales and profit expectations and even spoke of a record quarter.

The company has already sold 13.3 million trips for the summer season, which is 4.3 million more than announced when the figures for the second quarter were presented in May. Current business is encouraging, wrote analyst Jaina Mistry from the investment firm Jefferies in an initial assessment.

Although the pace of price increases has slowed somewhat, the trend is far from the weakness seen elsewhere in the sector, said analyst Richard Clarke of Bernstein Research. If there is any disappointment at all, it is that the pace of bookings has only increased slightly since the insolvency of tour operator and competitor FTI.

Overall, Tui increased its turnover in the third quarter of the financial year by 9.5 percent year-on-year to 5.8 billion euros. Adjusted for special effects, earnings before interest and taxes amounted to 231.9 million euros, almost 37 percent more than a year ago.

The collapse of the travel business due to the corona pandemic brought Tui to the brink of bankruptcy in 2020. The German government saved the group from ruin with billions in aid. Tui has now repaid the support from the Economic Stabilization Fund with fresh money from investors.