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Tui, Europe’s biggest travel firm, says British travellers are paying significantly more for their winter holidays than before the coronavirus pandemic.
Prices are up 23 per cent between October 2022 and March 2023 compared with the same period in 2018-19.
The soaring costs are not deterring buyers, with UK sales 5 per cent ahead of where they were before the Covid crisis. Across Europe as a whole, sales are down by one-sixth.
Announcing its full year results from October 2021 to September 2022, the Anglo-German company said: “A largely normal environment only started for the group with the last financial quarter.”
Tui says that, amid continuing political uncertainty, people are booking later.
The Tui Group reported a headline profit of €1.04bn (£900m) in the final quarter of its financial year, covering July to September 2022.
The firm provided 7.6 million holidays in the peak summer months, down 7 per cent compared with the same spell in 2019. Tui flights flew 92 per cent full.
But previous quarters, when Covid travel restrictions were still widely in force, depleted earnings before interest and tax to €409m (£352m).
Flight disruption, particularly in early summer, cost the firm €58m (£50m). Due to severe ground handling constraints, Tui cancelled the holidays of tens of thousands of customers from Manchester airport in May and June. The firm experienced problems all summer at Amsterdam airport.
Net debt fell to €3.4bn (£2.9bn), compared with €5bn (£4.3bn) in the previous year.
The incoming chief executive, Sebastian Ebel, said: “All in all we are very happy.
“Tui is stable and on its way back to sustainable, profitable growth.
“Tourism remains a long-term and attractive growth sector. All fundamental data point to this, and the long-term megatrends from which our industry particularly benefits, remain intact.
“We also expect 2023 to be a solid and good year, but we are very aware of external market factors.”
The firm says the business environment remains “challenging” due to the war in Ukraine, the ongoing impact of the Covid pandemic, inflation and high energy prices.
Tui says it “intends to significantly broaden its product portfolio by making the traditional package tour, which is made up of previously purchased components, much more flexible and individual, and thus more dynamic”.
The company is moving into city breaks, a market sector it has largely ignored previously.
Cruises rebounded strongly in the summer compared with a year earlier. “Load factor” – the proportion of cabins occupied – fell as low as 39 per cent in summer 2021. This year the comparable figure was 80 per cent, with some brands rising to 93 per cent.
“Cruise is back to normality,” said Mr Ebel.
He said Tui is “well placed for strong growth”.