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Tui sees decline in UK holiday bookings
Europe's largest travel operator, Tui, has recorded a 10% revenue decline in summer holiday bookings from UK customers, citing heightened caution due to the Iran conflict. The company also observed a shift in demand from Eastern to Western Mediterranean destinations, with travelers booking trips closer to departure dates.
Capacity adjustments and fuel concerns
Tui is reducing the number of seats purchased from airline partners by 4-5% for the summer season while keeping its own flight operations unchanged. Chief Executive Sebastien Ebel dismissed fears of jet fuel shortages in the near term, though concerns persist over the closure of the Strait of Hormuz, a critical route for oil and liquefied natural gas.
The strait's blockade has driven up jet fuel prices, prompting some airlines to raise ticket costs or cut capacity to attract hesitant travelers. EU Energy Commissioner Dan Jorgensen stated on Wednesday that the bloc does not anticipate a severe jet fuel supply crisis in the short term, despite ongoing tensions in the US-Israel conflict with Iran.
Financial impact and industry trends
Tui's first-quarter results revealed a €40 million (£34.7 million) profit hit linked to the Middle East conflict, including repatriation costs and lost revenue. The company reported an underlying loss before interest and tax of €188 million, an improvement from last year's €207 million loss. Overall, summer booking revenue fell by 7% compared to 2025.
"While the industry insists there are no immediate fuel shortages, consumers remain nervous. Greater clarity on alternative fuel sources is needed before travelers feel confident booking their summer holidays,"
Russ Mould, Investment Director at AJ Bell
Consumer caution and shifting booking patterns
Aarin Chiekrie, an equity analyst at Hargreaves Lansdown, noted that consumers are increasingly hesitant about holiday spending but have not abandoned travel plans entirely. Recent data shows a trend toward last-minute bookings, with Barclays reporting a 7.5% drop in travel agent spending and a 5.7% decline in holiday expenditures in April compared to last year.
Dame Irene Hays, owner of UK-based Hays Travel, described the industry as "suffering" due to economic uncertainty and geopolitical instability. However, she highlighted strong performance in the cruise sector and tour holidays, particularly in destinations outside the US and Middle East, such as Canada, Japan, Australia, South Africa, and Thailand.
"Previously, travelers booked seven months or more in advance, but now that window has narrowed to 16 weeks. While deals are still available, booking earlier ensures better choices,"
Dame Irene Hays, Owner of Hays Travel
Call for clarity amid uncertainty
Industry leaders emphasize the need for reduced uncertainty to restore consumer confidence. Dame Irene Hays stressed the importance of swift clarity to stabilize the travel market, urging travelers to book early for optimal options.
