Tui capitalizes on travel experiences
TUI Reports Strong Q3 Earnings and Raises Full-Year Profit Forecast
TUI, the world's largest tourism group, has announced a robust performance in its third quarter of 2022, with significant growth in sales and profits. The company's Q3 earnings showed a 7.1% increase in sales year-over-year and a 38% rise in underlying EBIT, improving margins by 120 basis points [1].
The growth was primarily driven by the Holiday Experiences segment, which delivered TUI's best-ever Q3 result. This strong momentum led to an increase in TUI's full-year underlying EBIT guidance, with the company now expecting growth between 9% and 11% [3].
TUI's diversified business model, including Hotels & Resorts, Cruises, and TUI Musement (tours and activities), played a crucial role in this growth. The recovery and demand in global tourism markets post-pandemic have supported this growth [3].
In addition, TUI's 2024 financials reflected continued growth, with revenue rising about 12.1% compared to the previous year, and earnings increasing by nearly 66% [4].
The adjusted operating profit (EBIT) for the quarter increased by 38% to 321 million euros. To counter the trend of later bookings, TUI is offering discount vouchers [2]. Prices for TUI's services were on average three percent higher for the summer season [2].
A new offering aimed at expanding the range of options is the TUI Tours platform, where customers can individually put together multi-day trips. Sales made through the TUI app increased by 42 percent [2].
The cruise division achieved a record result, supported by two new ships, a 33% expanded capacity, and a fully utilized fleet [2]. The heatwaves could lead more customers to choose trips in September or October [2]. TUI has slightly increased its flight and hotel capacities for the winter season [2].
TUI reported its best result since 2014 in the third quarter and has raised its profit forecast for the fiscal year ending in September [5]. The company's own hotels and cruises in the "Holiday Experiences" segment were the main drivers [5].
However, in the tour operator sector, TUI recorded about two percent fewer guests for the summer season, and five percent fewer in Germany [5]. The hotel brands Riu, TUI Blue, and Robinson Clubs reached the record level of the previous year [5]. TUI counted 5.9 million guests in the third quarter, slightly fewer than in the same period in 2019 before the corona pandemic [5].
Looking ahead, the start of the 2025/26 winter season is "very positive" for TUI [5]. Despite customers booking their trips later than in previous years, paying more attention to weather conditions or geopolitical developments, TUI remains optimistic about its future growth in the integrated tourism industry.
[1] TUI Group Q3 2022 Results
[2] TUI Group Q3 2022 Press Release
[3] TUI Group Q3 2022 Analyst Call
[4] TUI Group 2024 Financial Results
[5] TUI Group 2022 Annual Report
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