By Yadarisa Shabong
(Reuters) -Summer holiday bookings at TUI were approaching pre-COVID levels on pent-up demand, the world’s largest holiday company said on Tuesday, with a steady recovery in Britain since restrictions and testing rules were lifted.
TUI said underlying operating loss in the first quarter ending December was at 274 million euros ($313 million). Citi analysts expect bigger-than-expected losses in the current quarter before a potential recovery, sending TUI shares 4% lower.
The group, which runs hotels, airlines, cruises and travel agencies, said 3.5 million TUI customers had booked a trip for summer 2022, as of Jan. 30, around 72% of the levels seen in the same period in 2019. But new bookings matched pre-crisis levels, it said.
Bigger holiday budgets and demand for packages as well as additional services such as room or hotel upgrades boosted its average selling price, which is up 22%, it said, despite having offered discounts and promotions to lure in customers.
TUI Chief Executive Fritz Joussen said in a media call the lifting of COVID testing rules in Britain had a positive impact on booking behaviour and that Britain was the most important market for TUI currently due to higher margin bookings.
Long-haul travel was also looking more attractive, he added.
While inflation was an issue, Joussen said there was no impact on bookings because households had built up savings in the pandemic.
TUI, which has been bailed out multiple times by the German government and taken more than 4 billion euros ($4.6 billion) in state loans and raised equity to ride out the crisis, said it would hand back about 0.7 billion euros in state aid by April.
It had a debt pile of 5.1 billion euros at the end of the quarter, with cash and cash equivalents at 3.3 billion euros as of last week.
Stifel analyst Mark Irvine-Fortescue expects increased focus on TUI’s debt and balance sheet position as a potential recovery in the sector gains traction.
($1 = 0.8760 euros)
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(Reporting by Yadarisa Shabong in Bengaluru; Editing by Sherry Jacob-Phillips and Edmund Blair)
