The travel company Tui Group more than halved its losses over the past six months and is predicting a “strong travel summer” as customers continue to book long-awaited holidays despite cost of living pressures.
Europe’s largest holiday company said future bookings remained “unabatedly high” as international travel bounced back from the coronavirus pandemic, but said there would not be many last-minute deals because it was facing rising costs.
Bookings currently stand at 85% of the levels of summer 2019, but the pace has picked up in the past six weeks. UK customers are leading the way in planning their getaways, with British market bookings 11% higher than in summer 2019.
Tui Group’s chief executive, Fritz Joussen, said prices of holidays were rising, and the company was facing higher fuel costs for its planes and cruise ships, which risked remaining high.
“There will be practically no last-minute offers at low prices this summer,” Joussen said.
The travel operator added that holidaymakers were spending more money while they were away, often opting for longer breaks and choosing a higher-quality hotel or room.
More customers were booking package tours, pushing Tui’s average prices higher, including a 20% increase on summer 2022 breaks.
Tui said almost 1.9 million passengers travelled with the company during the past six months, almost 10 times as many as in the same period a year earlier.
The company reported a pre-tax loss of €130m (£111.1m) between October and the end of March. This compared with a €357m loss for the same period a year earlier, when international travel was severely restricted under coronavirus mitigation measures.
Joussen said he expected Tui to become profitable again in the current financial year after two years of crisis. “The strong Easter business was already the first important indicator. The high demand for travel and the good business performance now confirm our forecasts: 2022 will be a good financial year with a strong travel summer,” he said.
However, the company sounded a note of caution amid the conflict in Ukraine and rising inflation, and said such uncertainties prevented it from issuing a specific financial forecast for the current financial year.
A return to more normal travel operations has not been without difficulties for Tui. Earlier this month, it told passengers that they should bring their own “plane picnics” to eat on their flights, after staff shortages prevented it from serving food and drink on some of its journeys.
The company told its airline passengers on Monday that it had “resolved” problems with its onboard catering and that they would once again be able buy food and drinks onboard.
Meanwhile, some airline customers have taken to social media in recent days to complain about cancelled or delayed flights. Some said they had been stuck at UK airports for hours.
On Monday, figures from Barclaycard showed April was the strongest month for international travel spending since before the pandemic, with Britons taking advantage of the easing of Covid restrictions to book foreign holidays.
The credit provider, which processes almost half of all card transactions, said consumer spending grew 18.1% in April as airlines and travel agents had their best month since the onset of the pandemic more than two years ago.