European tour operator, TUI, has announced a record-breaking quarter with strong demand for holidays across all of its divisions. The company’s hotels, tours, and cruise businesses have all performed well, resulting in a total revenue of €5.8bn (£5bn) for the three months ending in June – a 9% increase from the same period last year.
TUI has reported that nearly six million holidaymakers have travelled with the company during this time, with a 6% increase in bookings and a 3% increase in prices. These numbers have helped to offset inflationary costs, despite concerns in the travel industry about economic uncertainty, delays in plane deliveries, and rising jet fuel prices.
According to results published on Wednesday, TUI’s most popular destinations continue to be Spain, Greece, and Turkey. The company also acknowledged the collapse of its German rival, FTI, in June as a contributing factor to its success.
TUI’s third quarter revenue was its highest ever, and underlying earnings before interest and tax (EBIT) saw a significant increase of 37% to €232m (£200m) – surpassing analysts’ forecast of €217m (£186m). Chief Executive Sebastian Ebel expressed his satisfaction with the company’s performance, stating, “For the eighth consecutive time, we are reporting double-digit growth in underlying EBIT. In a challenging market environment, this also demonstrates the strength and future viability of our business model.”
Ebel further highlighted the company’s uniqueness in the industry, stating, “We are a developer, investor, and operator in the destinations, which makes us very different from our competitors.” TUI also reported a promising start to the upcoming winter season, with 32% of its offerings already sold in the UK.
In the business world, concerns have been raised about the cyclical nature of the travel industry. However, Derren Nathan from investment firm Hargreaves Lansdown believes that TUI has more flexibility in its capacity than it used to, and there is currently little sign of the company struggling to fill plane seats or sunbeds.
Julie Palmer, a partner at consultancy firm Begbies Traynor, also commented on TUI’s performance, stating, “Despite weakness elsewhere in the industry, TUI’s customer demand remains resilient.” She added, “The travel sector’s recovery trajectory is proving to be more of a steady climb than a rapid ascent, with consumer confidence and spending still regaining their footing in a world that has been reshaped by global events.”
Looking ahead, Palmer believes that TUI will need to adapt to changing consumer preferences, tap into emerging travel trends, and take advantage of any upturn in market conditions to continue its success in an increasingly competitive market.
These results come after TUI cancelled its listing on the London Stock Exchange earlier this year.
