Package holiday giant TUI yesterday reported record revenues for the quarter to March, with its UK operation seeing a jump in the volume and price of bookings.

The holidays and flights operator highlighted strong demand as it reported revenues of 3.6 billion euros for the three months to March, the second quarter of its financial year. This represented a rise of 16% on the same period a year earlier.

TUI said the record revenues reflected “the strength of demand for our product portfolio at improved prices across our businesses”.

At the earnings before interest and tax (EBIT) level, TUI made a loss of 188.7 million euros in the quarter to March on an underlying basis, but this was an improvement of 53.6 million euros on the same period last year.

TUI noted: “Both our ongoing operations in UK and Nordic reported higher results supported by increased volumes at higher prices.”

Commenting on its winter 2023/24 season, TUI said: “Bookings across all our source markets were higher and notably both our key markets in UK and Germany reported increased bookings levels compared to our last update as the season ended with ASP (average selling price) ahead of winter 2022/23. In UK, bookings closed up 11%, whilst bookings in Germany finished 10% higher.”

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Overall, the winter 2023/24 season closed with bookings up 9%, TUI noted. It added that the ASP “also held up well”, rising by 3%, and highlighted “a strong lates market”.

Revealing how summer 2024 was progressing, TUI declared: “UK sales are 3% ahead, with 65% of the season sold to date. In our other key market, Germany, sales are well ahead at plus-7% with 60% of the season sold.”

Looking at summer 2024 across its business, TUI said: “Bookings for the summer 2024 season continue to be promising, with 60% of the season sold. Bookings taken to date are 5% higher, supported by increased prices, up 4%.”

Susannah Streeter, head of money and markets at stockbroker Hargreaves Lansdown, said: “TUI has flown into calmer skies as holidaymakers showed enthusiasm for getaways as spring approached. The winter booking season ended strongly, helping reduce losses at the group more quickly than expected. The dismally wet weather in key markets may well have helped boost demand for breaks in the sun, with revenue soaring 16% in the second quarter.”

She added: “There is also promising momentum for the upcoming season with demand buoyant for the summer – bookings are up 5% and average prices up 4%, with 60% of available holidays sold. The hike in prices isn’t putting off holidaymakers, with families ringfencing budgets for a spot on the sun lounger.”

Ms Streeter highlighted the strength of the outlook.

She said: “The signs are that bookings are set to remain robust. Recent data from Barclaycard for April showed that, although overall retail spending dipped, transactions at travel agents soared 14.4% while spend jumped by more than 7%.”

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TUI reiterated its guidance that it would raise full-year EBIT by 25%, and increase revenue by at least 10% over the 12 months to September.

The holiday and airline group said: “Our strategic roadmap, the strong operational recovery and the measures taken to strengthen our balance sheet lay the foundations for future profitable growth. Our guidance for FY 2024 is based on the strong performance in H1, with underlying EBIT up 232 million euros - supported by a significant improvement in hotels and cruises and by the return to our normal hedging policy in our markets and airlines.

“We see the positive trends in our business continuing in H2, but also recognise the current macroeconomic as well as geopolitical uncertainties especially in the Middle East, with 40% of the summer 2024 left to sell. We therefore reconfirm our guidance for FY 2024 as published in our annual report 2023.”

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TUI added: “We continue to closely monitor geopolitical events as they unfold, especially concerning the Middle East and around the Arabian Peninsula. Our flexible business model allows us the option to adjust capacity from the eastern to western Mediterranean should there be a further escalation of the conflict in this region which has a significant and prolonged effect on customer demand.”