TUI Group surpassed earnings expectations in the first quarter of 2024 with the help of a surge in demand for holiday experiences like cruises and the increasing use of dynamic packaging.

TUI saw record revenue of $4.6 billion (€4.3 billion) in the quarter — a 15% rise from the same period last year, despite the usual winter travel lull.

“In a persistently challenging environment, people’s high willingness to travel ensures strong economic development in all areas of the group,” TUI’s CEO Sebastian Ebel said.

While almost all travel segments contributed to the uptick, the company’s “holiday experience” segment — which includes hotels, resorts, cruises and activities — played an outsized role in increasing revenue.

TUI’s management attributed some of the results to investing in dynamic packaging options during booking.

Cruise revenue increased by 44.7% from last year and hotel revenue increased by 19.3%. Both saw a significant rise in rates and capacity.

“We are almost at the 100% we are used to seeing when it comes to occupancy,” Ebel said in a press call on Tuesday morning. “So this is a very very good development.”

TUI Musement, the experiences division of TUI Group, found similar trends. Musement showed a 16% increase in the number of experiences sold during the same period last year.

The increase in experience-based bookings might also be a result of TUI’s focus on new deals and offerings that prioritize bespoke customer booking processes.

TUI also plans to develop direct relationships with low-cost airlines and hotels to improve their connection with customers. Having inventory direct from suppliers can aid in customer service.

Momentum for dynamic packaging

In May 2023, the company announced plans to test dynamic pricing for travel packages in the UK, giving customers more flexibility to package flights, accommodation, and experiences separately while keeping all their plans within one booking.

In the past nine months, it has increased sales of dynamic packaging.

“What is really important for us is that we have increased the share of dynamic packaging — an area which we identified as one of our growth sectors,” said Ebel on Tuesday. “The momentum is there. It’s a very strong pillar.”

While management didn’t mention specific figures, Ebel said that dynamic packaging has grown by 25% and has done especially well in the United Kingdom.

The Group is also making an effort to reach customers more directly.

In January, TUI Musement signed a new contract with European low-cost carrier EasyJet that allows customers to add experiences to their flights and holiday packages.