A few days of skiing, a week of winter sun or a short cruise? Holidays will be a lot more expensive this winter.
TUI Group, one of the largest holiday groups in the world, predicted on Wednesday that holidays will be an average of 7 percent more expensive this winter than last year. This is mainly due to higher inflation and sharply increased energy costs. Compared to the winter 2018/2019, before the corona crisis, prices are even almost a third higher. Sunweb, among others, previously stated that holidays will also become more expensive in the summer.
Despite this, the number of bookings for this summer at TUI is a third higher than last season, especially from British tourists. Holidaymakers do book shorter and less distant holidays, according to TUI, for example to Egypt instead of the Dominican Republic.
TUI Group – also the largest tour operator in the Netherlands – announced the financial figures for the past financial year on Wednesday. The German group had an excellent fourth quarter (July, August and September) with a turnover of 7.6 billion euros. That is more than double that of the summer of 2021. The gross result, before interest and tax, was 977 million euros in the three summer months (2021: 34 million euros).
In the entire financial year 2021/2022, TUI Group achieved a turnover of 16.55 billion euros. That was four times as many as 2020/2021, when the tourism sector was still heavily affected by the pandemic. The lion’s share of the turnover (14.8 billion) comes from the tour operators in the group. TUI also provides other forms of holidays, such as cruises, excursions and entertainment.
The gross result for 2021/2022 was 409 million euros (previous financial year: -2 billion). Due to the high interest charges on ‘corona loans’ in particular, TUI suffered a net loss of 277 million euros.
Pay off corona support
The holiday group uses the positive financial results, among other things, to repay a large part of the corona support provided by the German government. TUI Group wants to repay at least 730 million euros.
Among other things, the group is repaying a ‘silent participation’ from the German state, a loan that can be converted into shares, worth 420 million. The company also wants to significantly reduce a loan of 2.1 billion from the German state investment bank KfW. Germany provided a total of 4.2 billion in aid.
TUI Group emphasized again on Wednesday that the group wants to make its way of working more flexible. Previously, most customers booked a pre-assembled and complete package: flight, hotel, transfers, excursions. The group believes that this should be more dynamic, also because TUI still has a market to win here, according to the management. Tourists should be able to compose their holiday more according to their own preferences. The group wants to invest heavily in the necessary apps for this.
TUI also stated that the company does not necessarily need to own more hotels, planes and cruise ships.