TUI is predicting a “strong travel summer” for 2022. For its second financial quarter of the year, the company reported both “strong booking and business performance.”
In the past six weeks, TUI's new bookings were above the comparable level for summer 2019. The strong return of the operating business generated significant cash inflows in the period under review, resulting in a free cash flow of €1.24 billion. As at May 6, TUI had €3.8 billion in financial resources.
At 1.9 million, the number of customers traveling with TUI in the period under review increased almost tenfold year over year. Turnover was around nine times higher and the usual seasonal loss was almost halved compared with the same period last year.
At the end of the period under review, TUI’s net debt stood at around €3.9 billion, compared with around €5.1 billion in the previous quarter. The target remains unchanged at a gross leverage ratio of below three. Due to the positive business development, the stabilization of the market and the ongoing transformation of the company, the basis has been created to gradually return the KfW credit lines and to reduce the German government's participation.
“The strong Easter business was already the first important indicator,” TUI CEO Fritz Joussen said. “The high demand for travel and the good business performance now confirm our forecasts. 2022 will be a good financial year with a strong travel summer. In terms of capacity utilization, we are almost reaching the pre-Corona level of 2019. After two years of crisis, things are clearly progressing and we expect to become profitable again in the current financial year with a significantly positive underlying EBIT. This is the basis for new growth."
For the third quarter in a row, TUI Hotels & Resorts reported positive earnings since the start of the pandemic. From January to March, underlying earnings before interest and taxes were €24 million (previous year: €-103 million). Average revenue per bed-night rose by €17 year over year to €86 while occupancy rate improved 29 percentage points to 65 percent.
TUI has more than 400 hotels and resorts across the RIU, TUI Blue and Robinson brands.