TUI Europe, Europe’s biggest package tour operator revealed that consumers on a budget are choosing more affordable destinations like Egypt, Bulgaria and Tunisia.
Travel company reports that the inflationary pressures are lessening, stabilizing average holiday prices.
The cost of travel remains “significantly” higher than 2019 levels, despite this flattening.
When traditional tourist destinations like Spain are out of reach, travellers have been forced to look for value-for money options.
Sebastian Ebel is the CEO of TUI. He highlighted that new customers are coming into existence with tight budgets, but who still prioritize vacations.
Ebel added: “We see a lot of new clients who are on a tight budget but want to go away. They have EUR1,000/PS800 for yearly vacations and, if it’s not available in Spain, they search elsewhere.
Ebel assures that there is plenty of choice for travelers when it comes to destinations like Mallorca and Canary Islands, which are often fully booked in peak season.
Tunisia, Egypt and other holiday destinations are regaining popularity after 2015 terrorist attacks that had a significant impact on visitor numbers.
The shift in consumer preferences is reflected by the fact that many consumers are gravitating towards regions with a combination of affordable prices and unique experiences.
Profit growth accelerates TUI’s recovery in financial terms
TUI announced a 35% rise in its pre-tax profit, which reached EUR1.3bn during the fiscal year that ended September 30.
Demand for cruises and package holidays has also been strong, which have helped to boost the recovery.
As it works to recover from the pandemic losses, it has successfully reduced net debt to EUR 1,6 billion.
TUI was chosen by more than 20 millions travellers in the last year. This is a 7 percent increase compared to the prior period.
The growth of the travel industry is a testament to its appeal, despite inflation affecting spending patterns.
TUI’s return to profitability follows the substantial bailouts provided by government during COVID-19, when TUI suffered a EUR3bn loss for a full year due to travel closures.
The operator has now re-built its finances to meet the rising demand of international travel.
Anti-tourism protests and the Spanish Government
TUI is taking steps to reach out to local communities amid a rise in anti-tourism protests throughout Spain.
The protests in Mallorca and Gran Canaria, two popular tourist destinations, have brought up concerns about housing affordability and urban eviction.
Ebel told reporters that he spoke with locals in Mallorca about these issues after protesters from tens and thousands called for the rethinking of an economic model they claim has driven up house prices and forced local people to leave cities.
Ebel explained, “We take customers to hotels that have good conditions for our staff and good contracts.
We also acknowledge that housing is a major problem in certain areas. “We have always been ready and are still willing to construct more housing for ourselves.”
It was also noted that he acknowledged the housing issues and stated his willingness to invest in housing for staff.
TUI’s resilience and ability to adapt as the company navigates changing travel trends and social economic pressures is a sign of its recovery.
The company’s growth is assured with a focus on community involvement and affordable travel.
TUI: Tunisia and Egypt are replacing the traditional destinations of budget travelers.
