Advances in digitalisation and the expansion of the sales platform are expected to enable „significant cost savings“ at Tui. Moreover, they will boost the group’s competitiveness, particularly in new travel segments such as individual city trips. This should serve to improve cash flow and further strengthen the balance sheet, said CEO Sebastian Ebel at a press conference during the presentation of the nine-month figures.

The tourism giant does not intend to provide details of the expected savings until December. However, Ebel emphasised that there would be „no disruptive job cuts,“ referring instead to ongoing staff turnover, among other things. Tui shares, which are listed on the MDax and have lagged behind the MDax over the course of the year, rose strongly in the days after the earnings announcement.

Meanwhile, after nine months of the current 2024/25 fiscal year (as of September 30), Tui is in a better position than management had originally expected, so that the forecast for adjusted earnings before interest and taxes (underlying Ebit) based on constant exchange rates has been raised to a plus of 9% to 11%, up from the previous 7% to 10%. Ebel acknowledged that Tui is feeling a sharp decline in bookings to Middle Eastern holiday destinations, particularly from its home market of Germany. Travel demand to the US is also suffering from the fact that the US administration has sometimes restricted entry, which is putting tourists off. Overall, however, Tui has been able to compensate for this thanks to its diverse global holiday offerings.

The driving force behind this success is the vacation experience, particularly the cruise business. The division increased its operating profit by 57% in the third quarter, which was largely responsible for the jump in profits for the entire division. The largest division, Markets + Airlines, also saw an increase in earnings of 33 million euros in the reporting quarter, although the West region (France and Benelux) continues to post high losses. After nine months, Markets + Airlines has accumulated total losses of 440 million. On the one hand, Tui wants to make greater use of its own airline to fly to destinations with its own hotels, but on the other hand, the company is struggling with cost disadvantages compared to other airlines.

The Executive Board nevertheless expects the transformation of the division to progress. CFO Mathias Kiep said that the recently issued Schuldschein amounting to 250 million euros could be used to repay aircraft leases early, and that the balance sheet had now been „optimised“ in this regard. Ebel emphasised that ownership of some of the fleet increases operational flexibility in deploying aircraft, which has strengthened Tui's competitiveness.

Net debt was not affected by the transaction. After nine months, it fell slightly year-on-year to 1.9 (2.1) billion euros. For the full year, it is expected to be even lower than the 1.6 billion euros in 2023/24. Interest expenses fell significantly to 176 (236) million euros in the first nine months to the end of June, and are now expected to be „slightly below“ the previously communicated range of 260 to 280 million euros for the full year.

In the current summer season, Tui has been able to increase occupancy at its own hotels and resorts and raise the average daily rate by 6%. Nevertheless, there is a continuing trend toward late bookings. In Germany, a decline of 5% compared to the previous year is emerging, while in the UK there is an increase of 1%. 86% of the program has been sold. Winter business is off to a positive start.