(Bloomberg) -- TUI AG said recent bookings for the upcoming summer are running ahead of pre-pandemic levels, the latest sign the travel sector is booming despite high inflation sapping consumer spending power.
The world’s biggest tour operator said booking volumes since the start of the year exceeded 2019 levels, led by demand from travelers in the UK and Germany. Prices are also higher than pre-pandemic levels, the company said.
“Our strategy is clear: quality, cost discipline and market share,” TUI Chief Executive Officer Sebastian Ebel said. “Swift implementation of the strategy is having an effect, booking dynamics for Summer 2023 are encouraging.”
Like low-cost airlines, Hanover-based TUI is seeking to increase its market share as higher household bills weigh on consumer spending, pushing people toward package holidays that include flights, accommodation, bus transfers and food, helping them to control the cost of their trip.
A bumper summer 2023 would help TUI in its long recovery from the coronavirus pandemic. The company in December said it would repay its remaining bailout package by means of capital increase to take place later this year.
Shareholders will vote later today on whether to reduce the company’s share capital by a ratio of 10 to one. The move will boost TUI’s headline share price comfortably above their nominal value. Had TUI’s share price fallen below the nominal value of €1 per share, the company would not be able to undertake the capital raise.
Reporting earnings for its first quarter ending Dec. 31, TUI said losses narrowed to €153 million ($164 million), down from €274 million in the same quarter a year ago, but worse than analyst estimates for a €129 million decline. Still, TUI confirmed its full-year guidance for a significant increase in underlying earnings.
(Updates with additional context beginning in fourth paragraph.)
©2023 Bloomberg L.P.
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