Europe’s largest tour operator TUI has today reported a boost in profit in the 2024 financial year and projected further growth into 2025 as it bolsters its holiday business to meet rising demand.
While demand has remained strong, some airlines’ results this year were impacted by rising costs associated with labour disruptions, maintenance, or weaker business bookings.
TUI has managed to dodge some of these challenges and bolstered profits with its holiday business.
TUI’s underlying earnings before interest and tax (EBIT) in its financial year ending September rose by 33% to €1.3 billion from €0.9 billion last year.
Analysts polled by LSEG had expected an annual profit of €1.293 billion.
“Our focus on operational excellence, rapid implementation of the defined measures to improve earnings and transformation will continue to deliver significant growth. The TUI of tomorrow is well positioned,” said Sebastian Ebel, chief executive of TUI.
Operating profit for its holiday business increased to €1.1 billion in 2024, up from €822m the previous year.
TUI has managed to stay resilient due to its cost-effective “dynamic” pricing packages and its ability to control costs.
Packaged holiday businesses have flourished in 2024 as consumers look to control costs amidst inflationary pressures while still spending on holiday travel.
For financial year 2025, the company expects EBIT to increase by 7% to 10%, and revenue to grow by 5% to 10%, versus guidance for 25% EBIT and a 10% revenue growth this year. That is on the back of continued investment in the holiday business.