Strong Demand Propels TUI Group Bookings to 2019 Levels
Leisure travel giant TUI Group said this week that it was seeing its first near-breakeven quarterly result since the onset of Covid-19 expecting strong demand for travel to generate positive results full year despite a loss of 75 million euros in the third quarter (Q3) due to flight disruption across Europe.
One of the world’s largest tour operators, TUI said on Wednesday that it had almost broken even in Q3 2022 and would have been in the positive had there been no airport disruption.
The company said it had achieved 90 percent of summer 2019 booking levels in Q3 while average prices were significantly higher than 2019 and confirmed expectations to return to significantly positive EBIT in full-year 2022.
Free cash flow increased to 1.2 billion euros, state credit lines further reduced, net debt dropped to 3.3 billion euros and Q3 underlying operating loss came to 27 million euros, it said.
Commenting on the results, CEO Fritz Joussen and successor, now CFO Sebastian Ebel said TUI continues to expect a significantly positive underlying EBIT for 2022 and a stable demand despite the challenging environment.
Excluding unplanned additional costs due to irregularities in European air traffic, the group achieved a positive operating quarterly result for the first time since the beginning of the pandemic at 48 million euros. Initial forecasts placed gains at around 29 million euros.
In the positive were the company’s Holiday Experiences , Cruises, Tours and Activities, TUI Musement, and Hotels & Resorts segments.
“Our business performed well in the third quarter – despite the operational challenges in the European tourism sector. This shows the robustness of our integrated business model, the strength of the TUI brand and the continued high demand for holidays. We continue to expect a strong travel summer 2022 with capacity close to pre-crisis levels and significantly positive underlying EBIT for the full year,” said Ebel, CFO and designated CEO.
“People want to travel. Holidays continue to top the list of planned spending – this has not changed. Although the entire European airline sector continues to face challenges, we have successfully ramped up our business with a significant increase in demand and achieved a good third quarter,” said Ebel.
“TUI is a strong brand, trusted by holidaymakers and our partners in the destinations.”
According to TUI, booking momentum continues to be “encouraging”. In the period under review, 5.1 million guests traveled with TUI and currently has 11.5 million customers for summer 2022.
Group-wide, bookings are at 90 percent of summer 2019 levels and in July and August, bookings recouped 93 percent of pre-crisis levels.
As for trends, TUI said holidaymakers continue to book more on short notice, spend more money on their trips, book more package holidays and higher value services such as room upgrades and longer stays.
Earlier this year, TUI said it was expecting tourism numbers to Greece to reach pre-pandemic levels by the end of the summer and to mark an increase of up to 13 percent in 2023.