Europe is in the midst of a holiday boom, with companies from travel companies to airlines reporting soaring customer numbers and revenue.
TUI AG joined in today by announcing strong interim results showing a 15% increase in revenue in the first quarter, with increased demand and improved prices contributing to a boost in sales.
– Advertisement –
After a promising winter booking season, summer bookings have proven strong, with total group bookings across all seasons up 8% over last year.
The company announced that it has reaffirmed its full-year outlook for sales to increase by 10% and EBIT to expand by 25%.
Such revenue and profit growth has clearly pleased investors, with TUI AG’s share price up 3% on Tuesday at the time of writing.
“TUI reported record sales as resilient consumers took to the air.Cost of living pressures and economic uncertainty have kept us from enjoying sunny holidays. Much of the operational work carried out by TUI Sophie Rand Yates, principal equity analyst at Hargreaves Lansdown, said the move to expand the luxury side of its hotel portfolio was a smart move. He said it could help stay competitive if low-income people started booking fewer vacations.
But Rand Yates continued to warn that the group could find itself in trouble now that the holiday demand boom is receding.
“TUI also operates a large cruise business and the cash flow dynamics of operating such a large fleet make it even more at risk if holiday spending starts to decline. has done almost everything it can, but there remains an element of uncertainty.Unlike airlines that focus on short-haul routes, many of TUI’s routes fall into the more expensive medium-haul category, which poses risks. It will increase further.
“Doubts swirl around the possibility of TUI deciding to withdraw its London listing. Post-Brexit, the complexity and cost of maintaining a dual listing has increased and other companies have decided to take a similar route. There is little to change the business case, but the optics in London are less than ideal.
