Business

TUI customers pay a fifth more for summer trips

Status: 05/11/2022 10:58 a.m

The world’s largest travel group, TUI, expects significantly better business again in the current year. Customers are apparently willing to pay – and spend a fifth more on summer trips than before the Corona crisis.

The autumn and winter business went well for the TUI travel group. In the first half of the 2021/22 financial year, i.e. from the beginning of October to the end of March, the company achieved sales of around 4.5 billion euros thanks to strong demand. That was more than six times as much as in the corresponding period of the previous year, which was still heavily influenced by the restrictions caused by the corona pandemic, as TUI announced today.

The operating loss adjusted for special effects shrank by more than half to around 604 million euros. The bottom line is that the group loss has halved to 708 million euros. Losses during the comparatively low-sales winter season are nothing unusual in the travel industry. However, these were particularly high at TUI during the pandemic, for example.

TUI boss expects to be in the black again

Thanks to the strong demand for holiday travel, TUI boss Fritz Joussen expects earnings before interest and taxes, the so-called EBIT, adjusted for special effects, to be “significantly positive” in the current financial year up to the end of September. For the summer, Joussen expects almost as many holidaymakers as in 2019, the last full year before the pandemic.

The decisive reason for the turnaround seems to be the customers’ willingness to travel and, in particular, their willingness to pay. “In the past six weeks, bookings have been significantly higher overall than in the corresponding period of 2019.” The average prices for summer trips are 20 percent higher than before the Corona crisis.

“This reflects a higher proportion of package holidays in the product mix as well as higher demand for our summer holidays.” So it’s not just price increases that drive sales. On the contrary, customers are obviously also willing to book more complex and therefore more expensive travel packages. A package tour consists of at least two travel components such as flight, transfer or hotel, which are booked together.

Group wants to return state credit lines

With the significantly better business figures, net debt also fell further. From the point of view of the Management Board, the basis has thus been created to return further credit lines from the state bank KfW from the Corona crisis and reduce state involvement.

In the Corona crisis, the state had to protect the group with a total of 4.3 billion euros in financial aid. TUI currently does not need any money from taxpayers and only little from the banks, said Joussen.

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