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Tui shares fell more than 10 per cent on Tuesday after the German travel operator reported slower growth in bookings for its summer season, raising concerns about demand across the European travel industry.
The company said bookings in its airlines division for this summer were 2 per cent higher in the last three months of 2024 than a year earlier, with 32 per cent of its capacity sold, down from 7 per cent growth the previous quarter.
“Bookings have been slower . . . We have been less aggressive with the capacity and pricing,” said chief executive Sebastian Ebel.
Tui’s shares were trading at €7.63 by early afternoon in Frankfurt, down from €8.52 at Monday’s close. Other European airline shares also fell, with declines of almost 7 per cent for Wizz Air, 5 per cent for Lufthansa and 4 per cent for easyJet, triggered by rising oil prices pushing up fuel costs for airlines.
Tui said underlying earnings before tax and interest in its airlines division had fallen 31 per cent from the same quarter a year earlier, although this had been expected because of “higher investments ahead of the key summer season”.
“We were a little bit late and there we are, in catch-up mode,” Ebel said, adding that demand had improved since January.
He said Tui had been careful not to increase capacity because its priority was to “fill our capacity” to maximise profit.
Ebel also said the company was focused on expanding its dynamic packaging deals business with partners such as Ryanair, allowing consumers to choose from a range of flights when booking trips.
He added that such products were “risk-free and have good margins”, and outlined plans to expand the business into Nordic countries.
Tui reported underlying core profit of €51mn for the three months to the end of December, up from €6mn a year earlier, driven by a recovery in hotels and cruises. While it warned that investments in marketing and technology would hamper growth this year, the company reiterated its full-year guidance of increasing underlying core profit by 7 to 10 per cent.
“The pace of bookings for the last few months has been very weak,” said Richard Clarke, senior analyst at Bernstein. “It’s getting competitive out there . . . This is an industry where market share matters fundamentally.”
Tui said short and medium-haul destinations continued to drive its airline bookings, with the most popular destinations being the Canaries, Egypt and Cape Verde. In long-haul flights, it said the biggest increase in demand had been for flights to Thailand, with Mexico, Jamaica and the Dominican Republic also showing strong demand.
Tui, which operates more than 400 hotels, 17 cruise ships and five European airlines, has previously said it would focus on increasing its customer base to reduce reliance on the peak European holiday periods by offering trips to new destinations.
The company in August said it was seeking to meet demand from travellers for trips to long-haul destinations in Africa and Asia, amid a sustained boom at the higher end of the holiday market.
