TUI Group sees robust demand for package holidays in late 2024

German travel and tourism giant TUI Group announced its first quarter financial year 2025 earnings on Tuesday, for the October to December 2024 quarter. 

It noted that 3.7 million clients travelled with the company during this period, which was a rise of 6% on an annual basis. 

TUI experienced an 18% surge in dynamically packaged holidays compared to the same period the previous year, coming up to 0.7 million holidaymakers. These packages are tailor-made holidays, with clients being able to choose from a vast range of flight options. 

The company’s share price dropped 9.3% on Tuesday morning. 

Revenue for Q1 FY25 came up to €4.9 billion, which was a 13% increase compared to the corresponding period in the previous year. 

Underlying earnings before interest and taxes (EBIT) surged to €51m, compared to €6m in the same quarter in 2023. This was mainly because of robust performance in the Holiday Experiences department, which includes TUI Musement, Hotels & Resorts and Cruises. 

Fitch gave TUI a BB rating, with a stable outlook, bringing the company’s rating back up to pre-pandemic levels. 

TUI also reiterated its outlook for the financial year 2025, expected 7% to 10% hike in underlying EBIT, while estimating a 5% to 10% rise in revenue. 

Sebastian Ebel, the chief executive officer (CEO) of TUI AG, said in the Q1 FY25 earnings press release on the company’s website: “TUI is strategically well positioned. Thanks to our integrated business model, we create synergies between the two business areas Markets + Airline, with our tour operators and flight business, and Holiday Experiences, with our own Hotels, Cruises and TUI Musement. 

“The roadmap is clear: We are accelerating our transformation and aiming for global growth. We set the course for that in the last financial year and will continue to deliver consistently in 2025. The first quarter shows: our strategy is paying off, operationally we are delivering. People prioritise their holidays even in times of change, and even in a challenging economic environment in Europe for almost all sectors. For ten quarters in a row, TUI has successfully aligned trends, strategy and operational performance"

Mathias Kiep, the chief financial officer (CFO) of TUI Group, also said in the press release: “The promising performance in the first financial quarter of 2025, and thus the tenth consecutive quarter of earnings growth, will help us achieve our ambitious growth targets for the full year.”

TUI Group sees rising demand for short and medium-haul destinations

Increasing demand for winter short and medium-haul destinations boosted TUI’s Q1 FY25 earnings, with Egypt, the Canary Islands and the Cape Verde islands seeing a rebound in interest. At present, average prices for winter 2024/2025 are 4% higher on an annual basis. 

Similarly, average prices for summer 2025 have risen 4% as well, compared to the same period in the previous year. For summer this year, the most popular holiday destinations are Greece, Spain and Turkey. 

Current bookings for summer 2025 and winter 2024/2025 have increased 2% compared to the corresponding period in the previous year. 

Ebel also shared that along with cementing its tour operation business in key European markets, TUI is also increasing its focus on new markets with high growth potential in Asia, Latin America and Southeast Asia. This move is expected to go a long way in helping the company reduce its dependence on Europe.