Tui continues to benefit from good tourism business
Customers' travel enthusiasm continues to boost Tui: The hotel business, with brands like Riu, Tui Blue, and Robinson, has seen a significant increase, and cruises remain popular, allowing for higher prices. The average price has risen by three percent, the company reports. This growth was slightly below the previously mentioned four percent. Currently, short and medium-haul destinations, particularly in Spain, Greece, and Turkey, are in high demand. In the third quarter, up to the end of June, 5.8 million guests traveled with Tui, four percent more than the previous year. Overall, the company exceeded analysts' revenue and earnings expectations, describing it as a record quarter.
So far, Tui has sold 13.3 million trips for the summer season, 4.3 million more than when the figures for the second quarter were reported in May. The current business is encouraging, wrote analyst Jaina Mistry from the investment firm Jefferies in her initial assessment.
Although the pace of price increases has slowed, the development is still far from the weakness seen elsewhere in the sector, said analyst Richard Clarke from Bernstein Research. If there is any disappointment, it is that the booking pace has only slightly increased since the insolvency of travel operator and competitor FTI.
In the third quarter, Tui's revenue increased by 9.5 percent year-on-year to 5.8 billion euros. After adjusting for special effects, earnings before interest and taxes amounted to 231.9 million euros, a 37 percent increase from the previous year.
The collapse of the travel business due to the COVID-19 pandemic brought Tui to the brink of bankruptcy in 2020. The German state saved the company with billions in aid. Since then, Tui has repaid the support from the Economic Stabilization Fund with fresh capital from investors.
Tui's growth in the third quarter surpassed expectations, making it a record quarter for the company, but the increase in booking pace was only slight since the insolvency of FTI, representing an 'other' challenge that the company has had to navigate. Despite the slowdown in price increases, Tui's development is still stronger than what's seen in other parts of the sector, indicating that 'other' competitors are facing more significant challenges.
