TUI expects strong summer tourist season as revenue soars

German travel and tourism company TUI Group recently released a report outlining its performance during the first half of the year, noting a significantly improved second quarter and a strong uptick in revenue and operating profit.

According to the report, the group’s revenue during the second quarter of 2023 amounted to €3.2 billion, compared to €2.1 billion during the corresponding period of the previous year.

Moreover, the TUI Group’s underlying earnings before interest and taxes (EBIT) improved by €88 million euros, to a negative €242 million, during the second quarter of the year, which is typically a weaker quarter for the industry. When excluding exceptional items from the previous year, there is an improvement of €181 million.

In terms of the holiday experiences segment, with hotels, cruises and activities, there was an underlying EBIT of €80 million during the second quarter, an improvement of €148 million.

Regarding the markets and airlines segment, there was an underlying EBIT of negative €309 million, which is almost back to the levels recorded in 2019. When excluding the exceptional income of the previous year, there is an improvement of €47 million euros compared to the second quarter of 2022.

“2.4 million guests went on holiday with TUI during the period under review,” the company said in its report.

“There is also a continued strong booking trend, with bookings for summer 2023 currently at 13 per cent above the previous year, while average prices are also higher,” it added.

Moreover, according to the report, bookings have reached 96 per cent of summer 2019 levels, while in the last six weeks, bookings have exceeded the levels of that period.

The company also noted that the aid it had received from the state, as part of the German Economic Stabilisation Fund (WSF), has been fully repaid after a successful capital increase.

“To finance the repayments, a capital increase with subscription rights was successfully completed in April,” the company said, noting that gross proceeds amounted to approximately €1.8 billion.

The company explained that the proceeds were used to fully repay the remaining WSF stabilisation measures.

“TUI has kept its promise to repay the state aid as quickly as possible,” the company stressed in the report.

Additionally, net debt has been reduced to €3.1 billion pro forma, including the proceeds from the aforementioned capital increase.

“We have significantly increased our results in the second quarter, and the completed winter season has developed in line with our expectations with good prices,” TUI CEO Sebastian Ebel said.

“The strong booking trend, especially in the last six weeks, and the significantly improved quarterly figures confirm our expectations: we expect a strong summer and a good 2023 financial year with significantly higher operating profit,” he added.

Ebel went on to say that the company’s “strategic initiatives are taking effect”, making none of the WSF aid being repaid and that the company is “gearing everything towards profitable growth”.

“We want to return to our former strength,” Ebel stated.

“That is our ambition and our promise to customers, employees, partners and shareholders that made the successful capital increase possible,” he concluded.