German slowdown hits Tui bookings despite group’s record results

Tui reported an overall decline of 2% in group tour operator and airline bookings for this summer, despite a 3% rise in average selling price, but noted the shortfall was almost wholly due to a slower German market in quarterly results issued this week.

 

Group chief executive Sebastain Ebel noted UK summer bookings were 1% up on 2024 as the season moved into August, but bookings in Germany were 5% down.

 

He attributed the decline in Germany both to the crisis in the Middle East and the impact of the Trump administration in the US, saying: “Bookings collapsed to the Middle East and there was a decline in travel to the US.”

 

Tui reported its summer business was “characterised by a highly competitive environment with a continuing trend towards later bookings and was impacted by the hot weather in our source markets in June and July and conflict in the Middle East.”

 

However, looking to the current quarter, July to September, Ebel reported Tui’s hotels and resorts showed a 3% rise in occupancy year on year and 6% increase in average daily rate, and its cruise bookings were up 14% with occupancy 1% up on last year on year despite the group’s ships being “more than 100% full”.

 

Ebel explained the rise in cruise occupancy as due to accommodating more children on board, saying: “Our ships are sold out which gives room for price optimisation.”

 

He added: “We expect growth in [excursions and activities business] Tui Musement from selling more products to existing customers. But not only are Tui customers directed to Tui Musement, Tui Musement customers are directed to Tui.”

 

Ebel described bookings for the coming winter as “very positive”, with the UK – always the first market to launch – already 31% booked at a higher average selling price than a year ago.

 

He said the outlook for Tui was “favourable, despite all the challenges” and added: “We believe the shoulder months will become more and more important, especially November.

 

“Stronger shoulder seasons are a big opportunity for Tui. The global distribution platform we’ve built will bring customers from outside Europe.

 

“We’re looking for distribution of our own hotels, our own airline and of Tui Musement – our own products all round.

 

“The important thing is to get more flexibility. Regarding revenue, we really focus on margins.”

 

Tui revised its full-year guidance in line with the strong results, forecasting growth in its operating profit of 9%-11% year on year for the 12 months to September, up from its previous forecast of 7%-10%.