Tui Group forecasts ‘significant’ higher profit this year as holiday bookings boom
- Tui reveals summer season bookings up 13% on last year
- For the three months ended March, Tui’s revenue rose by €1bn to €3.15bn
- Mexico and the Caribbean were popular destinations among Tui customers.
Tui Group has maintained full-year guidance for ‘significant’ growth in underlying earnings as it continues to benefit from a rebound in travel demand.
The German travel giant revealed that bookings for the upcoming summer season are up 13 per cent on last year and 6 per cent above pre-pandemic levels, supported by higher prices and strong passenger demand.
It follows a bumper winter program for the company, with its bookings up a third of last year’s volume and with Cape Verde, Turkey and Egypt among the most popular destinations.
Rebound: Tui reveals bookings for the upcoming summer season are up 13 percent from the prior year and 6 percent from pre-pandemic levels
Travel businesses have seen a resurgence in business after experiencing unprecedented disruption and financial pain from the imposition of Covid-related restrictions during 2020 and 2021.
For the three months ended March, Tui’s revenue rose by nearly €1 billion to €3.15 billion, amid rising occupancy rates at Tui’s hotels and cruise travel businesses.
Of the 2.4 million people who vacationed with the firm during the quarter, Mexico and the Caribbean were particularly popular destinations, with occupancy rates at Tui’s hotels in both regions exceeding 90 percent.
But despite the extraordinary improvement in business, Tui still posted an operating loss of €395.3 million during the first half of the fiscal year.
Its net debt was also €4.2 billion at the end of March, an increase of 6.6 percent over the same time in 2022, partly due to a major cash outflow resulting from weaker December bookings and increased advance payments to suppliers.
However, the company hopes to reduce this figure to €1.8 billion by the end of September, thanks to a recent discounted rights issue that enabled it to fully repay aid borrowed from the German government during the pandemic. enabled.
Sophie Lund-Yates, principal equity analyst at Hargreaves Lansdowne, said: ‘Liquidity risk remains at the forefront of investors’ minds. The airline sector is prone to consolidation even during tough times, and weaker links are at greater risk of experiencing hardship.
‘Tui’s strong brand and more achievable price point offer pillars of strength. The main thing to monitor from here will be the credibility of demand after this summer is over.
‘A lot of this will be outside TUI’s control, but the powers that be will certainly be hoping for a soft economic landing.’
The firm’s results follow IAG, the owner of British Airways, EasyJet and Jet2, which have raised their profit forecasts in recent weeks amid a boom in summer bookings, even as Britons remain increasingly hit by the crisis. Are.
Tui’s shares were down 4.8 per cent on Wednesday morning at 535.2p, although their value is still up nearly 45 per cent since the start of the year.
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Source: www.dailymail.co.uk