TUI AG (LSE:TUI) confirmed it should return to “significant” positive underlying EBIT in the current year and said it expects to deliver further strong progress in the fourth quarter.
In a trading update ahead of full-year results, the leisure, travel and tourism group said underlying EBIT will significantly build on full-year 2019, driven by top-line growth and benefits from its global realignment programme.
"In 2022, we see a strong travel summer almost at the same level as summer 2019," TUI group chief executive officer, Fritz Joussen, and CFO, Sebastian Ebel, said.
The fourth quarter is flagged to show further strong progress with Hotels & Resorts set to deliver its fifth consecutive positive quarter, solid improvements in Cruises and TUI Musement while Markets & Airlines will be significantly profitable despite airport disruptions, the company added.
Overall Summer bookings totalled 12.9mln, a rise of 1.4mln since the quarter three update, with bookings at 91% of Summer 2019 levels, with the key departure months of July and August at 94% of Summer 2019 levels, TUI said.
Average selling prices held up strongly, the company noted, with 18% growth versus Summer 2019, which will help to soften the impact from the current higher inflationary environment while UK Summer 2022 cumulative bookings were 4% ahead of Summer 2019 with strong performances in Germany and Netherlands.
Whilst flight disruption costs remain at elevated levels they continued to improve through quarter four, the group said.
TUI expects Winter 2022/23 bookings to be close to pre-pandemic levels, currently standing at 78% of Winter 2018/19 levels with average selling prices 26% higher.
The group said it continues to see a trend towards a higher share of short-term bookings for Winter and strong pricing, confirming solid customer demand for holiday travel.
Hotels & Resorts continue to perform strongly in the fourth quarter, the firm said, with July and August occupancies broadly in line and with average rates above pre-pandemic levels. TUI said it expects to see continued strong demand for Winter 2022/23, especially in the Canaries and the Caribbean.
Cruises continued to recover in quarter four, with occupancies building strongly and rates achieving 2019 levels and TUI said mid-term bookings are increasing as customer confidence returns.