TUI buoyed by German booking bounce

TUI Blue Nevis (For Families) in Bulgaria
TUI Blue Nevis (For Families) in Bulgaria. (TUI Group)

TUI Group turned cash flow positive in its third quarter on the back of rising holiday demand in its continental Europe business led by Germany.

With restrictions lifted across much of Europe during the three months to the end of June, the Hanover-headquartered company was once again able to generate revenue from holiday sales. This, coupled with cost cutting meant that the group recording positive cash flow before financing (around €320 million) for the first time since the start of the pandemic. Losses before interest and taxes fell by 48.6% to €748 million with revenue up 805% to €649.7.

Demand for summer holidays remains relatively high. TUI recorded a total of 4.2 million bookings for summer 2021 with average prices nine per cent higher than for summer 2019 due to the high proportion of package holidays in current bookings. Capacity for the core months of the 2021 summer programme has been adjusted to 60 per cent of the 2019 summer programme.

“With one and a half million additional bookings since May and a total of more than four million bookings for the summer business, the figures are encouraging. Especially in Germany and in the continental European markets, the current booking figures show a high pent-up demand. In England, travel could only be resumed in mid-July. Demand and bookings there will therefore be reflected in the 4th quarter. Business is coming back and TUI's transformation is clearly having an impact,” TUI CEO Fritz Joussen said.

With travel restrictions making holidays difficult or impossible over the last 18 months, TUI has been forced to seek state support while also cutting costs within its business.  
In May, the Group announced the sale of a real estate portfolio of 21 properties to the Riu family. The sale is part of the company’s new “asset-right” approach, which it launched before the start of the pandemic.

All of the properties will remain part of TUI's hotel portfolio, will continue to be jointly operated by TUI and RIU. TUI received an initial €541 million, with a further €130 million to be added by 2023.