It’s lift off for Tui as UK holidaymakers shrug off cost of living crisis to spark a summer bookings boom
Holiday group Tui has said that its bookings have surged for the summer and next winter.
There had been fears the cost of living crisis would dampen demand, but results from airlines such as Ryanair, Wizz Air and easyJet as well as tour operators have indicated consumers are gearing up to get away this summer.
Tui, one of the world’s largest tour operators, carried 3.3m customers in the three months to the end of December, up by 1m on a year ago and almost back to 2019 levels.
Bookings up: Tui, one of the world’s largest tour operators, carried 3.3m customers in the three months to the end of December, up by 1m on a year ago and almost back to 2019 levels
As a result first-quarter revenue in the three months to December rose to £3.35billion from £2.1billion at the same time last year, while the group loss fell to £140million from £241million.
‘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.
The company said bookings for the 2023 winter and summer seasons hit 8.7m.
The UK and Germany drove the post-pandemic desire for sunshine with Spain, Greece and Turkey being the most popular destinations.
Tui’s chief executive Sebastian Ebel said: ‘Booking dynamics for summer 2023 are encouraging.’ He added that he was expecting ‘underlying earnings to increase significantly’ for the year.
European consumers are grappling with the highest levels of inflation in a generation, but to date demand for holidays has proved resilient.
Nevertheless the holiday company has been forced to hike prices as the cost of running airliners and cruise ships has increased after energy prices have surged following the war in Ukraine.
Russ Mould, analyst at AJ Bell, said: ‘There doesn’t seem to be any doubt about the lasting appeal of an escape away on holiday, something which has arguably been strengthened by the pandemic when Covid restrictions prevented overseas trips.
‘However, where there is more doubt is over holidaymakers’ capacity to spend, particularly as travel businesses push up their prices to cover their own spiralling costs.
‘Tui and its rivals face a very delicate task in protecting their own profitability without puncturing demand.’
The travel titan had its wings clipped this week after competitor Jet2 holidays passed it to become the UK’s largest tour operator.
Jet2 holidays boosted its passenger licence for 2023 by over 500,000 and is now allowed to carry 5.8m.
This is over half a million more than Tui, which has a licence for 5.3m, data issued by the Civil Aviation Authority has revealed.
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