High demand for summer 2021 leads to 10pc rise in holiday prices

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TUI Group is achieving a 10% increase in the average selling price of summer 2021 holidays, it revealed in a trading update this morning.

Bookings are racing 84% ahead of this time last year, although this is partly due to the earlier launch of its summer programme and also a high percentage of re-bookings.

It said it was seeing ‘strong customer intention to travel, with many customers wanting to secure their summer holidays well ahead of time’.

Across the whole group, TUI expects to operate 80% of its original planned capacity next summer.

“Although we remain early in the booking cycle, we see a favourable development, with bookings up 84% and ASP up 10% versus prior year, made up of both new bookings and rebookings and helped by the early launch of the Summer 21 programme,” it said.

The travel giant sold just 15% of its summer 2020 capacity due to the lockdown, but it has still managed to take 1.4 million people on holiday since it relaunched its operations in mi-June.

It has managed to sell 84% of its much-reduced capacity, but TUI further reduced its programme from July to the end of September to just 25% of its original planned capacity.

Overall, bookings for this summer are down 83% year on year and the average selling price is down 19%.

Its winter 2020/21 programme has been further reduced by 20% since its third-quarter update to just 40% of its adjusted capacity, which it said reflected consumer uncertainty relating to travel restrictions.

Winter bookings are down 59% year-on-year, in line with adjusted capacity, but the average selling price is 3% up.

“We will monitor and flexibly adapt our capacity, in line with demand as well as travel restrictions, to ensure we continue to responsibly offer our customers a range of safe winter holiday options,” it said.

Chief Executive Friedrich Joussen added: “Our integrated model, underpinned by our trusted and leading brand, offering differentiated products and attractive value propositions, combined with proven flexibility in a volatile environment, means we are strategically well placed to benefit as leisure travel volume recovers over the coming seasons.

“We are on track to complete the additional stabilisation package provided by the German Federal government as announced on 12 August with waiver approval secured from our Senior Notes bond holders.

“Our Global Realignment Programme is firmly underway with digitalisation initiatives accelerated throughout the Group. TUI will emerge a stronger, leaner, more digitalised business and is well positioned to benefit from the expected recovery.”