Europeans’ thirst for travel is driving TUI’s recovery. While household energy and food bills have surged in the wake of Russia’s invasion of Ukraine, consumers are still willing to spend on vacations despite the higher cost of accommodation and flights.
In the fiscal second quarter ending March 31, TUI’s loss narrowed to €242.2 million from €329.9 million a year. Analysts had estimated a loss of €228 million. TUI confirmed its full-year guidance for a significant increase in underlying earnings. Revenue rose to €3.2 billion from €2.1 billion. The company said had secured 8.3 million bookings to date for the summer, and that 55 per cent of the program for the season had been sold, which TUI called “broadly in line” with the same season in 2019.
“Outlook commentary is encouraging, with summer ‘23 booking close to pre-pandemic levels and pricing strong,” Jefferies International analyst James Wheatcroft wrote in a note. Like low-cost airlines, 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 and helping them to control the cost of their trip. – Bloomberg