Tui will hold its prices in face of a shortage of supply in the lates market to Spain this summer, but the group insists it won’t take advantage by raising prices.
Chief executive Fritz Joussen said customers “would not understand” if rooms cost more.
He told Travel Weekly: “I expect a shortage of supply in Spain and this will lead to two things – we will hold our exclusive capacity to the end and there will be a tendency for prices to go up in the destination.”
Demand for Spain this summer has swollen at the expense of Turkey, with industry analyst GfK reporting bookings to Spain up 25% year on year, but Turkey down 33%.
However, Joussen insisted Tui would hold its prices to Spain, saying: “There are a lot of loyal customers to Mallorca and they will not understand this year if the room costs more.
“You can have a short-term gain, but long term you lose [if you raise prices] because customers remember.
“We are not jumping into a destination and then going away. We are a long-term partner. The most important point is that customers return home happy from holiday.”
Joussen also suggested bookings to Turkey are improving. He said: “In Turkey we will have an issue in terms of margin but not in occupancy. Bookings are coming.”
Tui reported strong UK trading in half-year results released on Wednesday, with customer bookings and revenue for this summer both up 7% year on year.
Joussen said: “The UK performance is very strong because it has very good systems and direct sales.” He added: “We are also a bit less dependent on Turkey in the UK than in Germany.
“It is a good message for our industry – people want to travel and don’t stay at home. The market is very solid, our performance is very solid. Our model is very strong.”