TUI, the largest travel operator in Europe, has projected that its operating profit will increase by 25% in 2024. This comes after the company’s operational profit more than doubled this year due to the robust demand for vacations, cruises, and hotel stays, which resulted in an increase of 8% in its shares.
TUI, along with its competitors easyJet (EZJ.L) and Jet2 (JET2.L), has benefited from increasing demand this year as part of a global bounceback in travel. However, analysts have warned that earnings may have peaked due to the war in the Middle East and the possibility of a recession.
TUI stated its current bookings were solid when it reported its yearly results on Wednesday. However, the company remarked that there had been a “temporary slight slowing” in demand for trips to Egypt due to the war in the Middle East.
Overall, however, and taking into consideration the current state of the macroeconomic environment and the geopolitical concerns, it stated that bookings for this winter and next summer gave it confidence that operating profit would expand by at least 25% in this fiscal year on revenue that was at least 10% higher.
“Our strategic initiatives to increase value and the current booking trend lead us to expect a further improvement in 2024,” said Sebastian Ebel, the chief executive officer of TUI, in a publicly released statement on Wednesday.
By 08:20 GMT, the company’s shares had reached their highest level in four months, going up 8% to 552 pence. Bookings for the following summer, when the company generates the majority of its profits, are up 13% compared to the previous summer, and average prices have increased by 4%.
TUI reported an underlying operational profit of 977 million euros for the year ending September 30. This was the first full year since 2019 that pandemic travel restrictions had not harmed the company. The previous year’s profit was 409 million euros; on sales, which came in at 20.7 billion euros, it exceeded the levels in 2019.
The firm’s headquarters in Hanover also stated that it contemplated delisting from the London Stock Exchange and going with a premier standard listing in Frankfurt. This decision was made in light of the liquidity and ownership fluctuations over the past four years.
With the merger of Germany’s TUI and Britain’s First Choice Holidays in 2007, TUI Travel established a dual listing in London and Frankfurt to serve its customers better. According to the company’s statement, a proposal to depart London might be presented to shareholders at TUI’s annual meeting in February.
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