Tourexpi
TUI CEO Sebastian Ebel: “Travelling is very
popular. The trends are intact. We see growth opportunities in new markets,
through a broader offering and additional target groups. The transformation of
the segments remains a central component of our strategy. The first two
quarters of the year were very successful in operational terms. This underlines
our strength in growing profitably in a dynamic market environment. We are
aware of the ongoing challenges in the geopolitical environment and confirm our
expectations regarding revenue and earnings growth."
TUI continues to expect a good year as a whole and,
after six months, can also look back on a strong second quarter of the
financial year: TUI successfully closed the second quarter of the financial
year 2024 due to people's continued high willingness to travel. With 2.8
million guests in the reporting period, the tourism group achieved a record
turnover of 3.6 billion euros, an increase of 16 per cent year-on-year (Q2
2023: 3.2 billion euros). The Hotels & Resorts and Cruises segments
achieved record results and ensured that underlying Group EBIT improved
significantly to -189 million euros in the typically weaker second quarter of
the financial year. TUI Group CEO Sebastian Ebel: "Travelling is very
popular with people. We see trends that will further strengthen this in the
future: experiences are becoming more important than possessions, and the
middle classes are growing in many parts of the world. The first two quarters
of the financial year were very successful in operational terms. It clearly demonstrates
the resilience of our business model and strategy and emphasises our strength
in growing profitably in a dynamic market environment. We are seeing high
demand for package holidays, in particular, which we are producing more and
more flexibly and dynamically and which continue to offer the highest level of
protection for our customers. 80 per cent of our package holiday guests use our
app, which we are developing into a fully comprehensive travel companion. The
digital services go hand in hand with our successful bricks-and-mortar sales
organisation, which continues to play an important role. Travel agencies stand
for high-quality advice, service quality and higher contribution margins. The
significant increase in guests' willingness to recommend TUI to others and the
high customer satisfaction ratings in the first six months of the financial
year show that we are on the right track. We therefore continue to pursue our
goals with determination and implement them consistently. The transformation of
the segments remains a central component of our strategy and will show its
positive effects in the coming quarters and financial years. TUI's
international market position will also be further expanded. We are aware of
the ongoing challenges in the geopolitical environment and confirm our
expectations for the full year. We aim to increase revenue by at least 10 per
cent and underlying operating earnings by at least 25 per cent."
DEVELOPMENT OF THE SECOND QUARTER OF 2024
2.8 million guests travelled with TUI in the second
quarter of financial year 2024 – 14 per cent more than in the previous year
(2.4 million). At 93 per cent, the average load factor remained at the previous
year's high level. People's continued high willingness to travel, record
results in Hotels & Resorts and Cruises as well as higher prices and rates
ensured that the underlying Group operating result improved by 54 million euros
to -189 million euros (previous year: -242 million euros) in the second quarter
of the financial year, which is typically weaker in the industry. Revenue rose
by 16 per cent to a record high of 3.6 billion euros (previous year: 3.2
billion euros).
In the Holiday Experiences segment,
the Hotels & Resorts division achieved a record result of 117.4
million euros in the months from January to March 2024. The underlying EBIT of
the previous year was increased by more than half (previous year: 78.0 million
euros). The division also achieved its highest ever total revenue of 247.3
million euros in the reporting period. This corresponds to an increase of 13
per cent (Q2 2023: 218.3 million euros). This positive development was due to a
9 per cent increase in the number of overnight stays (7.6 million) and higher
room rates, as well as overall operationally strong business at the key hotel
brands, particularly Riu. Overall occupancy in the division was a high 81 per
cent. However, the average daily rate achieved rose by 9 per cent year-on-year
to 109 euros.
The Cruises sector continued its strong
operating performance in the second quarter of financial year 2024. Underlying
EBIT more than quadrupled compared to the previous year and reached a record
level of 70.1 million euros (previous year: 14.8 million euros). The reasons
for the positive earnings performance are higher capacity utilisation and
significantly improved average rates. The occupancy rate rose by 6 percentage
points year-on-year to 98 per cent, while the average rate across all cruise
brands improved by 20 per cent to 221 euros.
TUI Musement increased its revenue by 15 per
cent to 149.5 million euros in Q2 2024 (Q2 2023: 130.3 million euros),
underlining the strong growth in this segment and the advantage of the Group's
integrated business model. At -16.5 million euros, underlying EBIT was 3.7
million euros lower than in the prior-year period (Q2 2023: -12.7 million
euros), as TUI Musement continues to invest in the expansion of its B2C
experience offering and more B2B offerings with partners. The number of guest
transfers in the destinations rose by 14 per cent to 3.9 million (Q2 2023: 3.4
million). In addition, 1.5 million experiences were sold in the reporting
period, an increase of 9 per cent compared to the previous year (Q2 2023: 1.3
million).
The Markets & Airlines segment
benefited from stronger demand and higher prices as well as the return to
normal hedging policy in the reporting period. However, results were impacted
by the prior year still being supported by positive results from our tour
operator venture in Canada, which was sold in May 2023. As a result, the
underlying EBIT fell by 17.6 million euros to –326.1 million euros (Q2 2023:
-308.5 million euros). The number of guests rose by 339,000 to 2.8 million. At
93 per cent, the average load factor once again reached the high level of the
same quarter of the previous year (Q2 2023: 93 per cent).
Despite better operating business in the current
quarter, earnings in the Northern Region (UK, Ireland and Nordic
countries) were -164.9 million euros, 17.4 million euros below the previous
year's figure (Q2 2023: -147.5 million euros) due to the absence of the
aforementioned earnings contribution from the Canadian venture.
The Central Region with tour operators in
Germany, Austria, Switzerland and Poland recorded a good operating performance
with higher customer numbers and increased prices. Underlying EBIT improved by
13.0 million euros to -89.1 million euros (previous year: -102.1 million
euros).
At -72.1 million euros, underlying EBIT in
the Western Region (France, Belgium, Netherlands) was 12.9 million
euros lower than in the previous year (Q2 2023: -59.2 million euros). More
tours sold and higher prices were offset by costs in connection with the
transformation of the business, including higher IT expenditure, in the
reporting period.
DEMAND FOR TRAVEL REMAINS GOOD, STRONG FINISH TO
WINTER 2023/24, BOOKINGS FOR SUMMER 2024 PROMISING WITH HIGHER AVERAGE PRICES –
GROUP CONFIRMS FULL-YEAR GUIDANCE
TUI ended the Winter 2023/24 season with a strong
lates market and with an overall significant increase in bookings of 9 per cent
and average prices 3 per cent higher. The weather also motivated many
last-minute travellers to make winter bookings. A total of 5.1 million
customers took a holiday with TUI in Winter 2023/24, with 700,000 more guests
since the trading update for the quarterly figures in February. Demand was
strongest for short and medium-haul destinations, with the Canary Islands and
Egypt being the most popular destinations and demand for Cabo Verde increasing
further.
Average prices for the upcoming Summer 2024 are
4 per cent higher than in the previous year. 60 per cent of the programme has
been sold, which is the same level as last year. Since the last update, 2.0
million bookings have been added, meaning that TUI has currently recorded a
total of 9.0 million bookings for the upcoming Summer 2024. This corresponds to
an increase of 5 per cent compared to the previous year. Medium and short-haul
destinations are also driving bookings for the summer. Greece, Turkey and the
Balearic Islands are once again proving to be the most popular destinations for
summer holidays. In the UK, bookings are currently 3 per cent higher, with 65
per cent of the season sold. In Germany, bookings are 7 per cent higher and 60
per cent of the programme has already been sold. TUI continues to closely
monitor geopolitical events, particularly in the Middle East and on the Arabian
Peninsula. Should the situation or customer demand change, the Group's business
model allows it to flexibly shift capacity from the Eastern to the Western
Mediterranean.
The Holiday Experiences segment recorded
a very positive booking trend. In the Hotels & Resorts division,
the number of available bed nights for the second half of the financial year
was 1 per cent above the previous year's level, while booked occupancy was 1
percentage point higher. Average daily rates in the second half of the year
were 9 per cent up on the previous year, with Turkey, Greece and the Balearic
Islands the most popular destinations.
In the Cruises sector, the entire fleet
of currently sixteen ships is in operation in the Summer half-year. Mein Schiff
7 will join the TUI Cruises fleet in June. The number of available passenger
days was up 6 per cent year-on-year in the second half of the year due to the
additional ship at TUI Cruises. The booked occupancy rate for the second half
of the financial year is currently +7 percentage points. Average daily rates
are +2 per cent higher overall.
TUI Musement is expanding its range of B2C
experiences and further developing its B2B business with partners. Bookings for
the business with excursions, activities and tickets are expected to increase
in the high single-digit range in the second half of the year. The number of
transfers should be in line with the operating performance in the Markets &
Airlines segment.
OUTLOOK FOR THE FULL YEAR 2024
Strong operational growth, the successful
implementation of strategic measures and a successful transformation form the
basis for future profitable growth. The outlook for the 2024 financial year is
based on the current macroeconomic and geopolitical uncertainties, particularly
in the Middle East. Expectations are based on the strong operating performance
in the Hotels and Cruises segments in the first six months of the financial
year and the return to our normal hedging policy in Markets & Airlines, as
well as the continuation of the overall positive trends in our business in the
second half of the year.
TUI therefore confirms its guidance for the
financial year 20241:
Revenue expected to increase by at least 10 per
cent compared to the previous year
Underlying EBIT expected to increase by at least 25
per cent compared to the previous year
1 on the basis of constant exchange rates
Image
Credit: © TUI Group
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