Europe’s largest travel company expects its annual profits to rise by at least a quarter, helped by people spending more on winter breaks to sunny destinations such as Egypt, Cape Verde, Thailand and Mexico.
Tui also said summer sales rose by 6%, helped by late bookings, for which Spain, Greece and Turkey were the most sought-after destinations. Tui has taken a further 1.4m bookings since its August update, to 14.7m for the summer. It sold nearly all of its holidays, and was slightly ahead of last year.
Tui has put up its prices, by 3% for the summer and 5% this winter, to mitigate rising costs, it said.
In Germany, Tui added more summer holidays after the owner of Europe’s third-largest operator, FTI Group, filed for insolvency in June, mainly to Turkey, Greece, the Balearics, the Canaries, and Egypt, and reported a 10% increase in bookings.
On the winter season Tui said it had a “promising start”, with bookings up 7%, “as consumers continue to prioritise spend for leisure experiences”. As well as Egypt and Cape Verde, the Canaries are popular again, while for long-haul destinations the Dominican Republic is in demand, along with Thailand and Mexico.
Demand for more expensive holidays has gone up, including dynamic packages where holidaymakers can book flights with other airlines than Tui and choose their own accommodation and car rental.
In the UK, bookings are similar to the high levels of the previous winter, with 40% of holidays sold so far.
The company expects underlying earnings before interest and tax to increase by at least 25% this year from last year’s €977m.
Tui’s cruise business runs 17 ships, some branded as Mein Schiff, focused on the Mediterranean, northern Europe and North America, while its Hapag-Lloyd division offers cruises to Asia and Antarctica. Occupancy levels have fallen as a result of late changes to itineraries because of the escalating conflict in the Middle East.
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Tui ditched its London stock market listing in June , and is now only listed on the Frankfurt stock exchange. Investors voted overwhelmingly (98.4%) in February to drop the UK listing, in a further blow to London’s standing as an international finance hub. Tui’s shares rose by 1.4% in Frankfurt on Tuesday.
The company had argued to shareholders that the axing of its London listing would simplify its structure and improve liquidity; some investors suggested that shares traded solely in Germany could lower costs and provide “support for EU airline ownership”.
