TUI set for stronger winter bookings after chaotic summer
In an Interview with Third Bridge Forum, the specialist said TUI’s summer booking capacity has been at 80-85% vs 2019. Rebookings from 2020-2021 were approximately 10% of that total volume, we were told.
The specialist expects TUI to have stronger booking momentum during the first half of winter, and could reach 100% capacity vs 2019 – if there are no repeats of last year’s Covid-19 restrictions. However, the second half of the winter could see that momentum slow, according to the specialist, as customers begin to feel the effects of rising inflation.
On booking trends, the specialist said more people are booking last minute as well as in a shorter booking window – both legacy effects from the pandemic. The specialist said this is unlikely to change “rapidly”.
Meanwhile, the specialist questioned the expected success of TUI’s new franchised hotel strategy. They said TUI is attempting to partner with “first and second row hotels” – hotels that traditionally have less trouble attracting customers. These hotel owners are therefore less likely to want to partner with TUI given they already have solid bookings. Franchises that TUI want to partner with may also not want to collaborate for similar reasons, the specialist added, further blunting the effectiveness of the policy.
The specialist said TUI Musement could be a key tool to help the company “upsell and upgrade” throughout the customer journey, from booking to travel. The specialist remarked the digitalisation process and quality of content on the Musement app is good, and it has strong offerings across the Mediterranean. However, in major European capitals such as London, Barcelona and Paris it is less effective and is an area TUI needs to improve, we heard.
Current rises in fuel costs are unlikely to affect TUI during the current summer period, the specialist said, as 45% of volumes were hedged against the pandemic. However, they said TUI will likely feel the impact of rising fuel costs next summer, as well as the effects of a stronger USD.
Click here to access all the human insights in Third Bridge Forum’s “TUI – bookings environment and cash flow outlook” Interview.
The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.
For any enquiries, please contact firstname.lastname@example.org