Tui upbeat about UK despite cost-of-living and inflation

Chief executive Sebastian Ebel said: “We have seen a very encouraging booking momentum. We have seen January recording high numbers and we see also strong numbers in February. Forward UK bookings are very good.”

Ebel said there were few signs of customers trading down because of cost-of-living and inflation increases.

“Last year we could see people went on vacation one day longer and we anticipated this would go back to normal. That’s a trend we have not seen. The only thing we do see is people are thinking in budgets and within that they look for the right vacation. Therefore, long-haul is less attractive than the Mediterranean or Egypt.

“We see cost increases for tourism are less than normal inflation and our customers are less sensitive to inflation. On the other hand, we want to grow our dynamic packaging and flight-only – if there is a small impact we would like to offset that by the growth we are bringing into the market.”

Ebel said summer prices were 25% above those of 2019 and 2% above those of 2022, with record online bookings in the UK and Germany in January.

“Volumes are coming very strongly and prices should cover inflation cost increases or will be above. We have seen a slight slowdown in Turkey but we think it is only temporary. On cruise we are close to 2019 levels but customers are still booking later. Demand is there, so we can expect a very good year.”

Chief financial officer Mathias Kiep added: “Revenues are back to where they were pre-pandemic. We have halved the losses we had last year.

“Our assumption is inflation cost increases will be less than 5%. Therefore we think tourism will be growing strongly.”

Ebel detailed success in launching dynamic packaging in Germany and accommodation-only in Scandinavia, with Belgium next on the list.

He told how in Germany, dynamic packaging was now 25% of sales, with links to airlines like Lufthansa now enabled with New Distribution Capability (NDC) technology.

“The UK is on the road map by the end of the year,” he said.

One way Tui is expanding is by using third-party airline partners, including easyJet. “We have started to bundle this product lately and it is one source of growth,” Ebel said, adding easyJet “fits very well with the Tui product”.

“Our priority is to grow market share and gain more customers. We are now confident we are entering a decade of significant growth for Tui.”

Ebel said Tui’s new app was “the biggest game-changer”. A year ago it had accounted for 3.3% of bookings, he said, but was now at 4.8%, “a 50% increase”. Customers could use it to book flights, museum entry or hotels.

“It is an important way to connect with the customer in future,” he added.