FTSE 250: TUI customers paid 18% more for summer holidays
TUI (TUI.L) has revealed that its customers paid 18% more for their summer holidays compared to 2019, adding further pressure to households facing the sharpest cost of living crisis in a century.
The tour operator stuck to its forecast of returning to profit this year despite losses in the third quarter, as travellers flocked to Europe and the Caribbean.
The Canaries, the Balearics, Greece and Turkey all continued to be popular holiday destinations, the German group said.
Meanwhile winter bookings have also risen, coming in at 78% of pre-COVID levels.
Bookings for November and December currently stand at 81% of 2018-2019 levels, and the group expects last-minute booking trends to continue during the winter period.
"The Canaries, Mexico, Egypt and Cape Verde are likely to form a key part of our holiday offer this upcoming winter,” TUI said.
It added that average selling prices are 26% higher for holidays over the winter season.
Fritz Joussen, outgoing chief executive, said in a joint statement with his replacement Sebastian Ebel: “The trend has been towards higher value or longer holidays with a higher overall holiday budget.
“This is encouraging and shows the current importance of holidays and travel experiences in the post-Corona era.
“Through the efficiency programmes successfully implemented during the pandemic, we have also significantly and sustainably reduced our cost structure. We are leaner, more digital and more efficient.”
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It came as TUI last month said that widespread airport disruption, including flight cancellations and delays, had cost it €75m (£66 million) in the three months to the end of June.
Customers were affected by around 200 cancelled flights in May and June, in particular due to staff shortages at Manchester Airport.
TUI said it would be seeking compensation from airports for the disruption and cost hit.
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“Although 2022 was expected to be the year of the comeback for travel stocks after the industry was ravaged by the pandemic, TUI and others have had a rough ride this year,” Victoria Scholar, head of investment at Interactive Investor, said.
“Shares in TUI have plummeted almost 50% year-to-date as the broader market sell-off, soaring cost inflation, labour shortages and the general chaos for international travellers have created a perfect storm for the company.
“Longer-term, investors in TUI have had a rough ride with shares down 75% over the last five years after the stock peaked in 2018.”
Shares in London were down 2% at the time of writing, despite initially opening higher.
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