Tui hit by holiday booking squeeze as war and costs keep travellers waiting

Tui has reported a modest recovery in holiday bookings over the past month, as travellers continue to delay decisions amid economic uncertainty and higher fuel costs.

The German-owned travel group said bookings had remained under pressure during the summer, with UK demand down 7 per cent and Germany, its two largest markets, falling 2 per cent.

The outlook for winter is weaker. Bookings for the season are currently 9 per cent lower in the UK and 4 per cent lower in Germany, although Tui said the pace of decline had begun to ease.

Over the past four weeks, summer bookings increased 2 per cent, while the decline in winter bookings narrowed to 1 per cent.

Tui said: “With demand still largely focused on the summer season, early indications for the new winter season point to a continuation of the later booking environment against the backdrop of ongoing geopolitical and economic uncertainty.

“In this environment, we continue to carefully manage capacity, retaining the flexibility to adjust capacity in line with customer demand.”

The company added: “Average selling prices continue to hold up well, reflecting the strength of our product proposition.”

Tui narrowed its full-year operating profit guidance following the improvement in bookings. It now expects underlying operating profit of between €1.2bn (£1.02bn) and €1.3bn (£1.11bn), compared with its previous range of €1.1bn (£940m) to €1.4bn (£1.2bn).

The group said cost-cutting measures and firm pricing were helping to offset the impact of higher fuel costs following the Iran war, which has added pressure across the travel industry.

Summer demand was concentrated on short- and medium-haul destinations, particularly Greece and Spain, including the Balearic and Canary islands.

For winter, Tui expects the Canaries, Spain, Egypt and Cape Verde to remain popular, while long-haul demand is focused on destinations including Thailand, Mexico and the Dominican Republic.

The booking pattern highlights the growing importance of flexibility for travel companies as consumers postpone spending decisions while geopolitical tensions, energy prices and household finances remain uncertain.