The cost-of-living crisis has failed to deter sun-seekers from prioritising travel and experiences as Tui returned to profitability in the key April to June period of this year.

The tour operator has reported an underlying pre-tax profit of €169.4m (£146m) for the quarter, almost €197m higher than the same period a year earlier. A 9% increase in passenger numbers to 5.5 million took bookings close to pre-pandemic levels as Tui carried 95% as many passengers as it did in the same quarter in 2019.

While the €25m (£21.6m) hit from July’s wildfires in Rhodes will be reflected in the group’s full-year results, Tui looks to be on course for recovery from the Covid pandemic.

The group has a wide package holiday business that spans well beyond simply running flights, giving it more to offer and plenty of cross-selling opportunities. Chief executive Sebastian Ebel has also indicated that Tui is set to broaden the number of destinations it offers to mitigate against climate change, even though the Mediterranean remains one of the top places for holidaymakers.

READ MORE: Rhodes wildfires cost Tui €25m as 8,000 customers evacuated

Earlier this week the company acquired the all-inclusive Emerald Zanzibar Resort & Spa in Tanzania as part of a strategy to expand its in-house portfolio of hotels. The deal was secured via a new global hotel fund that has been raising capital since being initiated last year in conjunction with a Luxembourg-based investment firm.

In total the group’s hotel portfolio has expanded by 32 properties in the current financial year, some being operated under the Tui Blue brand, as it seeks “profitable growth”.

But the drains on cash with planes, huge hotels and even cruise ships to fill are enormous. Debt levels at Tui have improved significantly over the year, helped by a recent €1.8bn rights issue as well as positive free cash flows, but at €2.2 billion the debt level is still eye-watering compared to profits.

This is likely why the shares are trading lower this afternoon despite the rebound in profits in the latest quarter. It could be a long haul for investors keen to see the reinstatement of dividend payments that have been suspended since the onset of Covid in 2020.