TUI sees 'encouraging' summer bookings as Q1 losses narrow

Holiday operator TUI said summer bookings were up 20% and reported a narrowing of first-quarter losses as travel continued to rebound from the effects of the Covid pandemic.

The company on Tuesday reported an underlying operating loss of €153.0m compared with a loss of €273.6m with “encouraging” booking momentum across both winter and summer seasons.

More than 3 million customers travelled during the three months to December 31, up 1 million and 93% of the same quarter in pre-pandemic 2019. Group revenue of €3.8bn, was up €1.4bn on the prior year above 2019’s €3.7bn.

Upcoming bookings for the 2023 winter and summer seasons hit 8.7 million. The travel sector is pinning its hopes that holiday demand, which has so far proved to be resilient to the cost-of-living crisis, will hold through the key months later in the year.

Price rises have not tracked inflation, said TUI chief executive Sebastian Ebel, who added that "quality, cost discipline and market share" were key priorities.

“Booking dynamics for summer 2023 are encouraging,” he said. TUI's numbers come a day after the company lost its place as the world’s biggest tour operator to rival Jet2 as Britain's Civil Aviation Authority reported that Jet2 had expanded its licensing to provide holidays for 5.9m people annually, compared with the 5.3m its rival can carry.

Shareholders are also expected to vote on a capital increase plan later on Tuesday to repay Germany's Economic Stablisation Fund, set to take place by the end of the year.

AJ Bell investment director Russ Mould said the results were "encouraging", but doubt remained over the sending capacity of holidaymakers 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," he said.

“(They) have already benefited from capacity coming out of the market – notably the failure of Thomas Cook – but there are new competitive threats emerging with EasyJet’s package holiday business growing rapidly.”

Reporting by Frank Prenesti for Sharecast.com