TUI Defies Market Gloom with Profitable Quarter Despite Challenges

TUI, Europe's top travel operator, surpassed quarterly profit forecasts, highlighting last-minute bookings and higher prices despite weaker demand. The company increased focus on international offerings and profit-heavy businesses like hotels, aiding results despite market challenges and a lackluster German performance.

TUI, Europe's leading travel operator, has reported a quarterly operating profit that exceeded expectations, citing a rise in last-minute bookings and increased pricing even amidst concerns over weakening demand. Despite struggling within its primary German market, TUI has strengthened results by enhancing its international offerings and prioritizing more profitable segments such as hotels.

Despite this strong performance, TUI's stock showed a 3.7% decrease at 0830 GMT, with equity research company Bernstein highlighting a 'substantial fall off in demand.' Nevertheless, TUI maintained that its results aligned with expectations, reporting an operating profit of 77.1 million euros for the first quarter of 2025, surpassing the 51 million euros from the previous year and the forecasted 66.7 million euros.

CEO Sebastian Ebel praised the robust quarterly figures, achieved in spite of losses from Hurricane Melissa's impact in Jamaica. He noted a trend towards later bookings and a geographic shift in demand from the U.S. to Asia, while maintaining optimism about European interest in Caribbean travel. TUI reaffirmed its December guidance, projecting revenue increases of 2%-4% and operating profit growth of 7%-10%, indicating no continued growth beyond 2025 as markets had anticipated.

(With inputs from agencies.)