TUI said recent bookings for the upcoming summer are running ahead of pre-pandemic levels, the latest sign the travel sector is booming despite high inflation sapping consumer spending power.
The world’s biggest tour operator said booking volumes since the start of the year have exceeded 2019 levels, led by demand from the UK and Germany. Prices are also higher than pre-pandemic levels, the company said.
“Our strategy is clear: quality, cost-discipline and market share,” said TUI chief executive Sebastian Ebel. Swift implementation of the strategy is having an effect, booking dynamics for summer 2023 are encouraging.
Like low-cost airlines, Hanover-based TUI is seeking to increase its market share as higher household bills weigh on consumer spending, pushing people towards package holidays that include flights, accommodation, bus transfers and food, helping them to control the cost of their trip.
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A bumper summer 2023 would help TUI in its long recovery from the coronavirus pandemic. The company in December said it would repay its remaining bailout package by means of capital increase to take place later this year.
Shareholders voted on Tuesday on whether to reduce the company’s share capital by a ratio of 10 to one. The move will boost TUI’s headline share price comfortably above its nominal value. Had Tui’s share price fallen below the nominal value of €1 per share, the company would not be able to undertake the capital raise.
Reporting earnings for its first quarter ending December 31st, TUI said losses narrowed to €153 million, down from €274 million in the same quarter a year ago, but worse than analyst estimates for a €129 million decline. Still, TUI confirmed its full-year guidance for a significant increase in underlying earnings. — Bloomberg
