Customer demand for travel remains strong: TUI publishes Q4 pre-close trading update and confirms earnings expectation for FY23.
Confirmation of expectations for a strong Summer 2023 with bookings in final month of season well ahead of Summer 2022. We are pleased to see the positive momentum continuing into Winter 2023/24 supported by higher prices. TUI is well positioned to achieve the results target for FY 2023.
- Current booking trends underlining the strong consumer demand in the current macro-economic environment and the popularity of our product offering
Summer 2023
- Strong pipeline of 13.7m1 bookings for the Summer 2023 season, a +5% increase against prior season and close to pre-pandemic levels at 96%
- 1.1m additional bookings taken since our Q3 2023 update with demand in the final month of season well ahead of Summer 2022 at +8%
- Season extension in particular in Greece and Turkey to accommodate increased demand
- ASP for Summer 2023 continues to be well ahead at +8% versus prior season and +27% versus Summer 2019, slightly ahead of the levels reported at Q3
Winter 2023/24
- Positive momentum continuing into Winter 2023/24 with an expanded programme and overall bookings up +15% against Winter 2022/23. Promising booking situation across all key source markets supported by higher prices +4% versus prior season. We are hedged for the coming Winter and Summer season in line with our expectations
- UK, as usual, with 38% of the season sold, is the most advanced booked on a larger programme. Bookings are at +8% and ASP +3% against Winter 2022/23
- Holiday Experiences trading remains well on track to deliver in line with expectations both for Summer 2023 and Winter 2023/24
Expectations
- TUI reconfirms expectations to increase underlying EBIT2 significantly for both Q4 2023 and also for FY 2023 against FY 2022
TUI Group - Q4 underlying EBIT FY 20232 expected to increase significantly against prior year – Hotels & Resorts anticipated to be close to an already strong prior year. Both Cruises and Markets & Airlines set to achieve a significantly improved result with a strong increase in results expected for TUI Musement
- FY 2023 Assumption2 – we reconfirm our expectations to increase underlying EBIT significantly for FY 2023
- Mid-term ambitions – we are focused on operational excellence and execution of our strategy. We have a clear strategy to accelerate profitable growth with new customer segments and more product sales. Our mid-term 2025/26 ambitions are for underlying EBIT to significantly build on €1.2bn3. We have a target to return to a gross leverage ratio4 of well below 3.0x and aim to return to a credit rating in line with the pre-pandemic rating of BB / Ba territory
- We will issue the TUI Group Full Year results on Wednesday 6 December 2023 and hold a presentation for investors and analysts in London on the same day. Further details will follow
2 Based on constant currency
3 FY 2019 underlying EBIT of €893m including €293m Boeing MAX cost impact
4 Defined as gross debt (financial liabilities incl. lease liabilities & net pension obligations) divided by underlying EBITDA
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About TUI Group
The TUI Group is one of the world's leading tourism groups and operates worldwide. The Group is headquartered in Germany. TUI shares are listed in the MDAX index of the Frankfurt Stock Exchange and in the regulated market of the Lower Saxony Stock Exchange in Hanover. TUI Group offers its 20 million customers integrated services from a single source and forms the entire tourism value chain under one roof. The Group owns over 400 hotels and resorts with premium brands such as RIU, TUI Blue and Robinson and 17 cruise ships, ranging from the MS Europa and MS Europa 2 in the luxury class and expedition ships in the HANSEATIC class to the Mein Schiff fleet of TUI Cruises and cruise ships operated by Marella Cruises in the UK. The Group also includes Europe's leading tour operator brands and online marketing platforms, for example for hotel-only or flight-only offers, five airlines with more than 130 modern medium- and long-haul aircraft and around 1,200 travel agencies. In addition to expanding its core business with hotels and cruises via successful joint ventures and activities in vacation destinations, TUI is increasingly focusing on the expansion of digital platforms. The Group is transforming itself into a global tourism platform company.
Global responsibility for sustainable economic, environmental and social action is at the heart of our corporate culture. With projects in 25 countries, the TUI Care Foundation initiated by TUI focuses on the positive effects of tourism, on education and training and on strengthening environmental and social standards. In this way, it supports the development of vacation destinations. The globally active TUI Care Foundation initiates projects that create new opportunities for the next generation.
