Tour giant TUI expects bright summer despite higher prices

By Andrey Sychev and Ilona Wissenbach

BERLIN (Reuters) -Europe's largest tour operator TUI forecast strong summer season demand on Wednesday, despite higher prices, after reporting stronger-than-forecast results in the typically less busy winter period.

Shares in TUI, which operates holidays, hotels, cruises and an airline, reversed early losses and were up around 2% at 0811 GMT as TUI confirmed its 2024 forecast of 10% revenue growth and a 25% increase in operating profit.

Peel Hunt analyst Ivor Jones said some investors had hoped TUI would upgrade its forecast before the travel-busy summer season which had lifted its shares ahead of the results.

Although it sees positive trends continuing in the second half, TUI said it "recognises the current macroeconomic as well as geopolitical uncertainties especially in the Middle East".

The German group, which recently switched its listing from London to Frankfurt, said 60% of the summer programme has been sold so far, in line with 2023's level, while prices had risen by 4% on average.

Travel firms are hopeful that 2024's summer season will surpass pre-pandemic levels, despite economic uncertainty, delays in plane deliveries and rising jet fuel prices.

TUI's revenue rose by 16% to a record 3.6 billion euros in the quarter, with cruises and hotels segments performing well.

TUI narrowed its operating loss in the January-March period to 189 million euros ($205 million), compared with a consensus forecast of a 246 million euros loss, LSEG data showed.

Milder winter weather motivated some travellers to make last-minute bookings in the second quarter, TUI said, adding that demand was strongest for short and medium-haul destinations, with the Canary Islands and Egypt being the most popular and demand for Cape Verde increasing further.

($1 = 0.9241 euros)

(Reporting by Andrey Sychev and Ilona Wissenbach, Editing by Rachel More and Alexander Smith)

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