Travel: Summer bookings make Tui optimistic

Travel
Summer bookings make Tui optimistic

Thanks to strong holiday demand, the world’s largest travel company Tui is heading towards business as before the corona pandemic. Travel bookings for winter and summer are eight percent higher than a year ago, said Join us before the general meeting on Tuesday in Hanover. For the current financial year 2023/24 (until the end of September), CEO Sebastian Ebel continues to expect a record profit in day-to-day business. However, CFO Mathias Kiep did not want to decide whether more guests would actually travel with Tui this time than before the Corona crisis.

On the stock exchange, the rice company from Hanover wants to concentrate on trading in Frankfurt in the future. The group wants to say goodbye to the London stock exchange, previously the main trading venue for Tui shares, in June. At the virtual general meeting on Tuesday, shareholders approved the plan with 98.35 percent of the votes. The main stock exchange will then be Frankfurt instead of London. This should also enable Tui to return to the MDax, the German index for medium-sized companies. “We would expect that we would then be included in the MDax in June,” said Kiep. There was support for this from shareholder representatives. “The Tui share is coming back home,” said Marc Tüngler, managing director of the German Association for the Protection of Securities Ownership (DSW). “This is a sign of a return to normality.”

London withdrawal should help with EU flight rights

The step should also help the group to further secure the requirements for air traffic rights in the EU after Brexit in the future, it was said. The EU requires that an airline like Tuifly that flies within the Union be majority owned and controlled by owners from the EU. CEO Ebel emphasized that there have been no problems here so far, even after Great Britain left the EU. “We have enough European shareholders today, even without the United Kingdom.” This will be further strengthened by a withdrawal from London, where more international investors traditionally buy. The Tui Group moved the main listing of its shares to London in 2014 as part of the merger with the former subsidiary Tui Travel and was therefore removed from the MDax.

In the last quarter from October to December, six percent more guests traveled with Tui. And on average they also spent more money on their vacation than a year before. Sales grew by 15 percent year-on-year to 4.3 billion euros. The net loss attributable to shareholders was roughly halved to just under 123 million euros. Travel companies are usually in the red in winter. They make their profits during the peak travel season in summer.

Customers don’t skimp on vacation

According to management’s assessment, things are looking good. Customers have not only booked eight percent more trips with Tui for winter and summer than a year ago. According to previous figures, they also spend an average of four percent more on it. “We expect a strong season for the summer,” said Kiep. Even in Germany, despite the weakening economy, there is no sign of an end to the desire to travel, said Kiep. “Leisure travel remains a high priority for our customers. This is more stable than we thought.”

If the business continues to grow at this rate, Tui’s guest numbers will return to the level of 2019, said CFO Kiep. In the last financial year, the group had around 19 million guests, 5.6 million of whom were from Germany, well below the 20.5 million from before the crisis. The slump in business as a result of the pandemic plunged Tui into an existential crisis in 2020. The German state saved the company from collapse with billions in aid.

Tui now sees itself on the rise again. In the current financial year until the end of September, Ebel and Kiep want to increase operating profit before special items by at least a quarter. After 977 million in the previous year, Tui would achieve a record operating result of 1.2 billion euros.

dpa