TUI reports no change in consumer behaviour as it aims for 25% growth

TUI customer behaviour
By Linsey McNeill
07/12/2023
Home » TUI reports no change in consumer behaviour as it aims for 25% growth

TUI says it hasn’t seen any significant change in consumer behaviour, despite the cost of living crisis and wildfires in the Mediterranean last summer.

CEO Sebastian Ebel said there was no evidence customers have switched to travelling to cooler destinations or travelling during the shoulder months rather than the high season, even after hundreds of holidaymakers were forced to flee from hotels due to forest fires in Rhodes in August.

The fires – along with those on other Greek islands – received widespread media coverage, and ABTA recently forecast a shift towards travelling in the shoulder months, although it put this down to price rather than concerns about the heat.

Sebastian said: “There is no reason to believe the Mediterranean countries will get less customers [next year], I would assume they will get more customers.”

In fact, he said Greece has fewer wildfires this summer than in the last 10 years. “It is a lot more about perception and media,” said Sebastian. “It is more dependent on short-term weather than climate change, we haven’t seen any significant change in customer behaviour.”

Likewise, it isn’t yet clear if customers are making decisions to reduce their carbon footprint.

TUI has recently started labelling ‘carbon-friendly hotels’ and its first ‘carbon-free’ hotels. “It will be interesting to see if customers book more, we want to achieve €1 per day per customer when we label a hotel, let’s see if we realise it, if the customer really wants to see that or is it really just a short-term decision on price and quality,” added Sebastian.

In terms of holiday spend, TUI said its customers have not been trading down, either in terms of accommodation standard or length of stay, despite fears to the contrary due to the squeeze on family finances. Sebastian said: “TUI is more on the upper end of the market, the four- and five-star segment, and there we haven’t seen that.

“We haven’t seen the customer move from five to four-star. What we think we have seen, but this is not our market, is that at the lower end of the market people are not able to spend as much as they were able to before. This is more competitive, but at the upper end of the market it is more important to provide quality.”

He described summer ’24 bookings as ‘very encouraging’, although stressed that it’s early days yet. “The momentum is there and that is very promising,” he added.

TUI did see a six-week lull in bookings for Egypt immediately following an escalation of the Israel – Hamas conflict in October but business had started to recover, said Sebastian. “After Christmas I would expect it will be well above 2019 numbers,” he added.

He was speaking after TUI revealed an increase in its pre-tax annual earnings to £472 million, which it is expecting to increase by ‘at least’ 25% next year.

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