In May, Tui said 2023 summer prices were 25% higher than in 2019, which helped its UK operation achieve a financial turnaround. Looking ahead, Tui Group chief executive Sebastian Ebel on Wednesday (6 December) predicted increases of between 3% and 4.5% next summer.
“Spain and Greece may be higher than Turkey, the Dominican Republic or Egypt," he said. "Overall, I would say it is 3% – plus or minus 1%. We think we will see very moderate price cost increases, which are below the price increases, so this will support margins.”
Ebel added the cost of living squeeze was not denting consumer confidence. “We have not seen that. We think for the next 12 months, the consumer climate is as it is,” he said.
“Tui is very much four- and five-star. We have seen prolongation of travel compared with pre-Covid – but at the lower end, people are probably not able to spend as much as before.”
Ebel, who also reiterated Tui’s support for third-party retailers, said 2023 sales were “almost at 2019 levels”. “At least half were new customers," he continued. "It is not that the market is growing, but Tui in the market is growing.”
He said the situation in the Middle East was having an impact on current bookings, notably Egypt, but this was now receding. “We are seeing a good winter momentum despite the Middle East, with significantly higher prices and we see very good summer bookings. The momentum is very promising.
“We have seen the impact for six, seven, eight weeks. We are now on a path of normalcy and going back to Egypt.”
Tui said average winter prices were up by 5% with the programme 50% sold, having had a “much brighter start” than last year. Summer bookings were up 13% with selling prices averaging a 4% increase.
Ebel said expansion of Tui’s accommodation-only platform in the UK was “taking off” and that attention was now turning to the touring sector.
“We have started central production of tours in this €1 billion market," said Ebel. "We see significant growth, but also in ancillaries like car rental and insurance, because the target for the five years is to have a platform programme.
“We have not been strong in dynamic packaging, especially in the UK. We started last year with 500,000 customers; we are growing it significantly. Significantly does not mean just 100,000 or 200,000 customers.”
Ebel added there had been no change in booking patterns because of wildfires and extreme temperatures. “Where we thought the shoulder season months would become stronger and high season less, that’s something we cannot see today.”
