The operator’s hotels and resorts segment delivered record first quarter (three months to 31 December) earnings of €150.3 million, up by 66% from €90.7 million a year earlier, driven by a two percentage point increase in occupancy to 80% and a 5% increase in average daily rates to €94.
Earnings from cruise, meanwhile, increased by 40% from €34.5 million to €48.2 million, which Tui attributed to strong demand and higher rates, plus a 10% year-on-year increase in available passenger cruise days to 2.6 million owing to fleet expansion. Average daily rates across cruise increased by 4% to €213.
These contributed to a €44.9 million increase in underlying earnings during what is typically the weaker winter quarter on increased revenue of €4.9 million, up from €4.3 million a year earlier. Some 3.7 million guests travelled with Tui between October and the end of December, a year-on-year increase of 6%.
Of these 3.7 million guests, 700,000 – nearly a fifth – travelled with Tui on a dynamically packaged holiday, an increase of 18% year-on-year. Tui has made no secret of its ambition to grow the proportion of its business it generates from dynamic packages, stating in its trading update on Tuesday (11 February) that the group "sees major growth opportunities in this area in future".
"Tui is strategically well positioned [and] we are accelerating our transformation and aiming for global growth," said chief executive Sebastian Ebel, who added the results highlighted people would continue to prioritise their holidays even "in times of change" and amid the "challenging economic environment" in Europe.
Despite this, Tui’s markets + airline segment – which comprises its tour operation and airline – suffered a deeper winter loss, with earnings declining by nearly a third (31%) from a loss of €95.4 million to one of €125.2 million, although Tui again stressed its dynamic packaging strategy was paying off "in a highly competitive environment".
This drop off was most pronounced in its northern region (UK, Ireland and Nordics) where earnings fell by three-quarters from a loss of €50.4 million during Q1 last year to a loss of €88.5 million. Chief executive Ebel said a change in UK strategy, including more dynamic pricing, had affected early-year trading.
Tui’s western region (Netherlands, Belgium and France) trimmed its loss slightly from -€46.3 million to -€44 million, while its central region (Germany, Austria, Switzerland and Poland) delivered positive earnings of €7 million, up from €1.3 million a year earlier.
The group’s first quarter performance has nonetheless given it confidence to offer guidance for its 2025 financial year (year to 30 September), with Tui expecting to deliver a 7-10% year-on-year increase in underlying earnings on a 5-10% year-on-year increase in revenue.
It said trading momentum was positive, with bookings for winter 2024/25 and summer 2025 up 2% year-on-year. Average prices for winter 2024/25 are currently running 4% ahead of last year, driven by short- and medium-haul demand for the Canaries, Egypt and Cape Verde. Summer pricing is running 4% ahead of last year.
Hotel occupancy is six percentage points ahead of last year and rates 7% ahead. Cruise occupancy is currently down by 1% year-on-year, although it is running one percentage point ahead for the second half of the year (six months to 30 September 2025).
Begbies Traynor partner Julie Palmer said it was pleasing to see Tui, and the wider travel industry, defy "wider economic turbulence and weakened consumer confidence".
"It is encouraging to see cash-conscious customers are still willing to shell out for Tui’s budget-friendly holidays, even as the operator nudges up prices," said Palmer.
"Ongoing geopolitical conflicts and the onset of tariffs from the Trump administration add layers of uncertainty over future costs, yet Tui’s prudent policy of hedging the majority of its fuel requirements and currency exposure should allow it to hold its course through these headwinds."
