When TUI does a little better in less than six months it has an impact on the economy of the south of Gran Canaria. Because, being the most profitable market for the tour operator, it is where it first applies the scissors to serve as an example to the rest of the destinations. TUI announced this Wednesday mediocre results although with a material rebound in moderate activity during the pandemic. Revenue more than doubled to €7.600 billion and currency rose by €1.100 billion as tourists took advantage of the first unrestricted opportunity since the start of the pandemic to get away. TUI London shares fell 8% after the German tourism company announced plans for a capital increase next year to pay for COVID-19 support, after a strong summer helped it return to profit .
The travel company has recovered markedly from its October lows, but is still down 40% in 2022. Travel disruption and concerns about the cost of living crisis have shaken investor confidence around the travel companies this year. Analysts highlighted uncertainty around tourists' ability to afford more expensive holidays next year as a reason to be cautious about TUI shares.
“In 2022, tourists have been willing to pay whatever it takes to get away for the first time in what seems like an era. However, if prices rise too much, affordability becomes an issue,” said AJ Bell chief investment officer Russ Mould. “This could be a key test for TUI in 2023 and, as people have moved to booking their holidays less in advance to avoid the risk of being caught off guard by the disruption, the company has limited visibility into its business. future".
