Tui hails 20% rise in summer prices as bookings near 2019 volume

Tui has hailed a 20% rise in its average summer holiday prices compared with 2019 and downplayed the potential impact of a recession on demand for travel this winter and next year.

The Tui Group reported summer 2022 bookings were at 90% of the volume of 2019 at the end of July, with an average selling price up 18% on the pre-crisis level.

But bookings for July and August were even higher, at 93% of the 2019 volume and prices on average 20% higher.

Incoming group chief executive Sebastian Ebel reported UK bookings “are positive for winter, there is good momentum”, although he added: “Continental bookings are lower.”

More: Tui reports dip in bookings due to flight disruption

Tui finances hit by UK air traffic disruption

Tui moves to clarify Spain entry rules

He said: “At the moment, it’s very difficult to forecast what November or December will be like, let alone January.

“We are seeing a very high proportion of bookings in the last four to eight weeks, especially in cruise. We are not back to long-term booking patterns.”

Ebel was speaking as Tui reported a loss of €331 million for the three months to June and a loss for the year to date of almost €1.08 billion.

However, the group forecast a profitable fourth quarter and Ebel said the company would have made an underlying operating profit in the third quarter but for flight-disruption costs of €75 million.

He acknowledged the growing cost-of-living crisis and risk of recession and said inflation would have in impact on Tui’s prices in upcoming seasons.

Ebel said: “No one can tell where prices will be [for fuel], but we will see a middle-digit increase in hotel prices.

“The inflation of [holiday] prices will be significant.” But he insisted: “It will be below the general inflation [rate].”

He added: “The cost of living is a concern. [But] we don’t expect too much of an impact from that. It could lead to less bookings, but Tui is in a [consumer] segment where people have more money.

“In more difficult times in the past we’ve seen customers book with the budget they have. We see shifts from one destination to another.”

For example, he said: “We’ve seen bookings shift from the Dominican Republic to Egypt.”

Ebel argued: “We are cautious on capacity so we can live with a range of demand, but we see stable demand overall in a more challenging environment. We may see less Caribbean and more Egypt.”

Outgoing Tui chief executive Fritz Joussen is due to step down at the end of September and be replaced by Ebel, who will in turn be replaced as chief financial officer by Matthias Kiep.

More: Tui reports dip in bookings due to flight disruption

Tui finances hit by UK air traffic disruption

Tui moves to clarify Spain entry rules

We will be happy to hear your thoughts

Leave a reply

Travel Booking Online
Logo