Package holidays boom shows no sign of abating as Tui enjoys surge in bookings
The post-pandemic boom in package holidays shows no sign of abating as giants such as Tui continue to enjoy high levels of bookings.
The German operator said in a trading update published on Tuesday it would stick to its profitability forecasts following an uptick in summer and winter reservations.
TUI saw a travel revival this summer as thousands of holidaymakers flocked to the beaches of Southern Europe or the Caribbeans after two years of staycations.
Summer bookings totalled 12.9 million, while winter reservations were at 78 per cent of pre-Covid levels.
But he group was nonetheless hit by a £63m loss in August as a result of this summer’s travel chaos, which forced Tui to cancel 200 flights in two months.
The UK performed especially well, as reservations went up 4 per cent above pre-Covid levels, while booking momentum increased in Germany and the Netherlands over the last few weeks.
“The trend has been towards higher value or longer holidays with a higher overall holiday budget,” chief executive Fritz Joussen and chief financial officer Sebastian Ebel said.
“This is encouraging and shows the current importance of holidays and travel experiences in the post-Corona era.”
Rival Jet2 reported similar results earlier this month, when it said its summer sale seat capacity was 14 per cent higher than 2019 levels.
Commenting on Tui’s update, Hargreaves Lansdown’s Derren Nathan called for caution as the cost-of-living crisis squeezes consumers’ pockets.
“We are seeing a consistent trend towards shorter term booking patterns and this could leave TUI exposed to last minute discounting with just 26 per cent of its winter programme currently sold,” he said.
“Consumers are clearly hesitant about taking on costs they may find much harder to squeeze into their budgets for next year and while holidays are nice to have they are not essential – especially when plenty of travel itches may already have been scratched, as pent-up demand was unleashed for summer 2022.”