Investors may still be fretting about whether TUI’s recent momentum can be maintained but chief executive Sebastian Ebel has no qualms about flagging a ‘decade of significant growth’ for the company.
Only time will tell whether this is hubris or justified confidence in the outlook for the business. TUI recently had its wings clipped, suffering the indignity of Jet2 overtaking it as the UK’s largest tour operator.
“A significant narrowing of losses as holiday sales moved back to pre-pandemic levels was encouraging. There doesn’t seem to be any doubt about the lasting appeal of an escape away on holiday, something which has arguably been strengthened by the pandemic when Covid restrictions prevented overseas trips,” said AJ Bell’s Russ Mould.
“However, where there is more doubt is over holidaymaker’s capacity to spend, particularly as travel businesses push up their prices to cover their own spiralling costs.
“TUI and its rivals face a very delicate task in protecting their own profitability without puncturing demand.
“TUI and others have already benefited from capacity coming out of the market – notably the failure of Thomas Cook – but there are new competitive threats emerging with EasyJet’s package holiday business growing rapidly.”
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