Europe's largest travel operator TUI has today flagged a 1% drop in summer bookings, which knocked its shares down nearly 7% in early trading.
TUI, which maintained its 2025 outlook, blamed the shift in summer bookings on a later Easter, which impacted most airlines' January to March reporting,
But European carriers Air France-KLM and British Airways-owner IAG so far have reported a stronger January to March.
In a statement, CEO Sebastian Ebel said that given economic conditions, 2025 will be "challenging". "Europe needs new momentum. We must return to an overall economy that is growing," he said.
Aanalysts and investors pointed particularly to the German market as a weak link. "The weakness in Germany could suggest we move away from the top end of guidance (if trends continue)," analyst Ed Vyvyan at Redburn Atlantic said.
A slowdown in bookings growth also hit TUI shares at the time of the group's last earnings report in February.
"We are clearly facing a slowdown in the level of demand (at TUI), notably in Germany," Fehmi Ben Naamane, an analyst at ODDO BHF, told Reuters.
TUI also today reported an underlying loss before interest and taxes of €206.8m in the January-to-March quarter, wider than the €188.7m loss it reported a year ago but narrower than the €224m expected by analysts polled by LSEG.
Ebel said on a media call that booking momentum had picked up since May 1 and summer bookings would likely be on par with last year.
"You can lose in winter and win in summer," Ebel told reporters, adding that the second quarter was the least important quarter of the year.
TUI has sought to diversify its income, expanding in Asia and central Europe, in an effort to bring in new streams of revenue as fears grow over European demand.
Ebel said it will likely take three years for the benefits of that strategy to show up in the TUI balance sheet, but that the company had managed to avoid losses tied to the new projects.
The group said its quarterly revenues slightly improved year-on-year to €3.71 billion from €3.65 billion in the same quarter last year.
