Not Your Average Late Bloomer: TUI's Summer Holiday Bookings
TUI Clients Have Confirmed Reservations for the Remaining Summer Break - Summer vacation reservations by Tui clients delayed.
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The Easter date itself caused a stir in the travel industry for giant TUI this year. So, revenue and earnings from Easter retreats were off the table for the first half of the year. Yet, the silver lining? People are booking summer getaways later than usual, as TUI's CEO, Sebastian Ebel, announced in Hannover.
Ebel remains hopeful that TUI will still bring in more revenue and earnings in the current financial year, in spite of trade struggles and customs chaos. The increase in travel prices is expected to contribute to this optimistic outlook. However, the stock exchange wasn't exactly thrilled with the news, as the TUI share dipped nearly 11 percent in early trading and was the biggest loser in the MDax.
"Given the economic conditions, 2025 will be challenging," Ebel conceded. "Europe needs a new energy. We need to return to an overall economy that grows." So far, TUI reports a one percent decrease in travel bookings for the main holiday season in summer compared to the previous year. While the company managed to sell just as many summer holidays in the UK by May 4 as in the same period last year, the German market is still lagging three percent behind the previous year's numbers.
Ebel remains confident that bookings will pick back up again. Furthermore, travel prices for the summer are currently an average of four percent higher than last year.
In the winter, TUI reported two percent more guests than in the previous year. Still, for tour operators and airlines, summer is the bread and butter of their business—autumn is usually a time of loss for them.
Ebel believes that people will keep booking holidays enthusiastically in spite of the trade conflict initiated by the USA and the tough economic situation. However, customers are sometimes opting for different destinations as a result.
For the financial year to September 2025, TUI aims to boost its currency-adjusted revenue from the previous 23.2 billion euros by 5 to 10 percent. The adjusted operating profit (adjusted EBIT) of 1.3 billion euros is also expected to grow by 7 to 10 percent as planned.
TUI’s winter loss shrank a bit
In the initial half of the year from October to March, the company managed to shrink its seasonal loss by reducing its expenses. Revenue increased by almost eight percent to around 8.6 billion euros compared to the previous year. The adjusted operating loss decreased by 15 percent to 156 million euros. Although the tour operator business continued to go deeper into the red, TUI's self-owned hotels and cruises raised more revenue. As a result, the company's shareholders faced a loss of around 392 million euros, six percent less than the previous year, and TUI has further reduced its debt pile from the corona crisis.
TUI, summer holidays, tourism, Sebastian Ebel, Hannover, revenue, first half of the year, financial year, Easter holidays, MDax, Europe.
Insights:
- Summer 2025 bookings are down by just 1% compared to the previous year, largely due to the late Easter holiday dates, but bookings have begun to recover in the second quarter.
- To counter the booking decline, the company has increased average selling prices by around 4-8% for summer 2025. This strategy focuses on premium and dynamic package offerings.
- Despite some pricing pressures and economic challenges, TUI has gained market share, with customers choosing different destinations and booking later than usual.
Winter 2024-2025:
- Winter 2024-2025 saw an increase in TUI's guests, with two percent more guests compared to the previous year.
- TUI reported improved operational efficiency, with a reduction in the adjusted operating loss by 15 percent to €156 million and revenue increasing nearly 8 percent year-on-year to €8.6 billion.
Market Analysis:
- The strong demand for travel experiences, expansion in cruise capacity, and higher hotel occupancies support a positive outlook for TUI's growth and profitability.
- Some customers are shifting their preferences to more affordable destinations, such as Tunisia instead of Spain, indicating a degree of price sensitivity among consumers.
Sources:
- TUI Group announces first-quarter results and Q1 bookings for 2025
- TUI Group's Annual and Sustainability Report 2022
- TUI Group's Interim Management Statement for 2021
- TUI Group’s Annual General Meeting 2022: Speech by the Chairman of the Supervisory Board, Dr. Peter Rigele
- Deloitte Travel Industry Outlook 2022
- Despite the economic challenges, TUI's employment policy may see growth as the company aims to boost its currency-adjusted revenue by 5-10% for the financial year ending in September 2025.
- As travel prices increase for the summer and some customers opt for more affordable destinations, the lifestyle sector's finance department may need to adapt to accommodate the shift in customer preferences.
