Travel firm Tui has seen annual earnings jump by a third thanks to surging demand for holidays, but expects growth to slow and revealed cost-conscious travellers are choosing cheaper destinations.
The German group, which recently ditched its listing on the London stock market to focus solely on Frankfurt, posted a 33% rise in underlying pre-tax earnings to 1.3 billion euro (£1.1 billion) in the year to September 30 as revenues lifted 12%.
But while Tui expects further growth in the new financial year, this will be at a slower pace, with revenues set to rise by between 5% and 10% and underlying pre-tax earnings to increase by 7% to 10%.
It noted rising costs and the timing of Easter this year.
“This is against the background of a higher inflationary environment and our expectation that the first half of the year will be impacted by a higher seasonality for investment ahead of the summer and the shift of Easter holidays into the third quarter,” it said.
While bookings and prices are ahead for the group for winter and summer, it is a more muted picture for demand in the UK.
UK winter bookings are flat on a year ago, with 62% of its programme sold, while they are 3% lower so far for the summer season with 27% sold, though Tui said it had seen “strong momentum” in the past month.
Chief executive Sebastian Ebel said people are still prepared to spend on holidays despite ongoing cost-of-living pressures.
But he said they were choosing less expensive destinations, such as Egypt.
Just in: #TUIresults for full year 2024 📈 +++ TUI delivers strong growth to 23.2 billion euros +++ underlying EBIT grows by 33% +++ robust customer demand, in particular in Hotels & Resorts as well as Cruises 🏨🚢 pic.twitter.com/IUDvyDZpHi
— TUI Group (@TUIGroup) December 11, 2024
“There’s a shift, especially in the family segment, to cheaper destinations,” Mr Ebel said.
The price of holidays rose across the group in the past year, and they are also running 5% ahead for winter and 3% for summer 2025.
This is not just down to increased prices, with Tui saying it is also partly due to holidaymakers choosing more expensive trips.
The group said popular trips so far for next summer are led by short and medium-haul destinations, with Greece, Turkey and the Balearics leading the way.
Overall, Tui bookings are 7% higher for next summer.
Tui is no longer on the London Stock Exchange after it ended its dual listing in June after around nine years in favour of a sole listing in Germany.
