Summer holiday bookings at TUI are approaching pre-COVID levels on pent-up demand, the world's largest holiday company said on Tuesday 8 February, with a steady recovery in Britain since restrictions and testing rules were lifted.
TUI said that underlying operating loss in the first quarter ending December was at €274 million. Citi analysts expect bigger-than-expected losses in the current quarter before a potential recovery.
Summer 2022 Bookings
The group, which runs hotels, airlines, cruises and travel agencies, said that 3.5 million TUI customers had booked a trip for summer 2022, as of 30 January, approximately 72% of the levels seen in the same period in 2019. But new bookings matched pre-crisis levels, it said.
Average Selling Price
Bigger holiday budgets and demand for packages as well as additional services such as room or hotel upgrades boosted its average selling price, which is up 22%, it said, despite having offered discounts and promotions to lure in customers.
Statements By TUI Chief Executive
TUI chief executive Fritz Joussen said in a media call that the lifting of COVID-19 testing rules in Britain had a positive impact on booking behaviour and that Britain is the most important market for TUI currently due to higher margin bookings.
Long-haul travel was also looking more attractive, he added.
While inflation is an issue, Joussen said that there was no impact on bookings because households had built up savings in the pandemic.
Handing Back State Aid
TUI, which has been bailed out multiple times by the German government and taken more than €4 billion in state loans and raised equity to ride out the crisis, said that it will hand back approximately €0.7 billion in state aid by April.
Debt Pile, Cash And Cash Equivalents
It had a debt pile of €5.1 billion euros at the end of the quarter, with cash and cash equivalents at €3.3 billion as of last week.
Increased Focus On Debt And Balance Sheet Position
Stifel analyst Mark Irvine-Fortescue expects increased focus on TUI's debt and balance sheet position as a potential recovery in the sector gains traction.