Tui warns no last minute deals as holiday bookings surge

TUI Planes

TUI Planes

Holiday giant Tui has said it expects summer bookings to “almost reach” 2019 levels this year, but warned there will be “no last minute” low price deals.

The company said bookings had surged in the past six weeks as people planned for summer breaks after the easing of Covid travel restrictions.

But it warned the impact of Covid and the Ukraine war on customer behaviour remained “difficult to predict”.

Tui’s boss warned of price rises and limited offers due to high fuel costs.

“There will be practically no last minute offers at low prices this summer,” said Fritz Joussen.

Tui’s losses halved to €614.5m (£525m) in the six months to March, as it hailed a strong recovery in customer demand.

As a result, the company told its shareholders it could return to profit by the end of the year.

“The high demand for travel and the very good business performance confirm our forecasts,” said Mr Joussen.

“2022 will be a good financial year. Capacity almost reaches pre-corona level of 2019.”

He added: “After two years of crisis, we expect Tui to become profitable again in the current financial year… This is the basis for new growth.”

In the past three months, 1.9 million customers flew with Tui which was an increase of 1.7 million compared to the same period in 2021 when global travel was on its knees due to the pandemic.

The firm said bookings for summer holidays were currently at 85% of 2019 levels, with reservations from UK customers up 11% on two years ago.

Analysis box by Katy Austin, Transport correspondent

Analysis box by Katy Austin, Transport correspondent

With Covid travel restrictions receding, demand for overseas summer holidays is coming back with a bang.

And for Tui, bookings from UK holidaymakers are leading the way back to the beach.

The tour operator says people are spending more on summer trips, for example going for longer and taking more package tours.

The optimism isn’t completely un-clouded. Tui – like other travel businesses – will be keeping an eye on how the Ukraine war, inflation and any future travel restrictions affect consumers’ behaviour.

Many airports and some airlines had a tricky Easter holiday period. Some simply didn’t have enough staff to cope with the sudden surge in demand.

But this is another sign that lots of people still want to go away, and they are getting booking.

In fact, people trying to book summer trips or hotels at the last minute might find their options limited as lots of other people have got there first.

The phasing out of UK testing rules in February has resulted in growing demand for flights and holidays. However, some countries still expect travellers to follow isolation and testing requirements.

On Tuesday, Heathrow Airport said it had seen strong demand in April and forecast that passenger numbers will grow this summer.

However, the UK’s biggest airport said demand would only hit 65% of pre-pandemic levels overall for the year as rising prices force customers to cut back.

The Bank of England expects inflation – the rate at which prices rise – to breach 10% later this year, putting the UK at risk of recession.

“The ongoing war in Ukraine, higher fuel costs, continuing travel restrictions for key markets like the United States and the potential for a further variant of concern creates uncertainty going forward,” the airport said.