Tui Group posts record sales in the third quarter and continued double-digit profit growth

Tui Group posted its highest ever third quarter revenue and its eighth consecutive quarter of double-digit profit growth.

Europe’s largest travel operator said its turnover rose 9 percent to 5.8 billion euros in the three months to June, which it attributed to “higher volumes at improved prices and fares.”

Meanwhile, the company’s underlying earnings before interest and tax rose 36.8 percent to €231.9 million following growth across all business divisions.

Its cruise division performed exceptionally well, with profits up 42.7 percent to 91.4 million euros, thanks to rising occupancy rates despite some TUI Cruises and Marella itineraries being cancelled or diverted.

Higher occupancy levels also helped the company’s Hotels & Resorts segment achieve record third-quarter earnings of €130.9 million, along with increased bed nights and daily room rates across all its brands.

A total of 5.8 million customers travelled with Tui, 4 percent more than in the same period last year and marginally increasing its average occupancy factor to 94 percent.

Travel agencies and airlines across Europe are enjoying a strong recovery despite widespread cost-of-living pressures continuing to weigh on consumers.

Since mid-May, Tui has added another 4.3 million bookings, giving it a total of 13.3 million bookings to date for the 2024 summer season.

Currently, TUI has sold 88 percent of its summer programme, with Spain, Greece and Turkey being the most popular destinations among tourists.

Demand from German customers has benefited from the collapse of rival travel group FTI Touristik, to which Tui responded by strengthening its capacity in countries such as Egypt, the Balearic Islands and the Canary Islands.

As a result, Tui has reiterated its full-year outlook of minimum underlying sales and earnings growth of 10 percent and 25 percent respectively.

Julie Palmer, partner at Begbies Traynor, said Tui’s performance showed “that the travel sector is more resilient than some parts of the market thought it might be this summer”.

He added: “The travel sector’s recovery trajectory is proving to be more of a steady climb than a rapid ascent, with consumer confidence and spending still regaining their footing in a world that has been reshaped by global events.”

Shares in Tui Group rose 2.6 percent to 5.69 euros on the Frankfurt Stock Exchange, but have fallen by around a fifth this year.

The company delisted from the London Stock Exchange in June after arguing to investors that maintaining a single listing in Hanover would cut costs, increase liquidity and simplify its structure.