European holidaymakers are changing the way they book trips as geopolitical uncertainty and higher aviation fuel costs create new challenges for the travel industry.
TUI, Europe's largest tour operator, has narrowed its 2026 underlying operating profit forecast while reporting that customers are increasingly waiting longer before confirming their holidays.
The company now expects full-year underlying earnings before interest and taxes to reach between €1.2 billion and €1.3 billion.
Its previous forecast had been wider, at between €1.1 billion and €1.4 billion.
TUI said uncertainty surrounding the Middle East conflict has influenced customer booking behaviour, while higher jet fuel prices have increased operating costs for airlines.
However, the company also reported encouraging signs of demand heading into the final months of 2026.
Travellers Are Booking Holidays Later
One of the most important trends highlighted by TUI is the shift towards later holiday bookings.
Many travellers traditionally reserve major holidays several months in advance.
Early bookings can help customers secure preferred hotels, flight times and destinations.
But economic and geopolitical uncertainty can make consumers reluctant to commit money far ahead of departure.
TUI said early indications for the new winter season suggest that this later-booking environment is continuing.
For travel companies, this can make demand more difficult to predict.
TUI Narrows Its 2026 Profit Outlook
TUI expects underlying earnings before interest and taxes for the year to fall between €1.2 billion and €1.3 billion.
Previously, the company had forecast a range of €1.1 billion to €1.4 billion.
A narrower forecast does not necessarily mean that demand has collapsed.
Instead, it provides a more specific range for the company's expected financial performance as the year progresses.
TUI operates airlines, hotels and cruise ships, meaning its performance depends on several different areas of the global travel industry.
Higher Jet Fuel Prices Are a Major Challenge
Fuel represents one of the most significant operating expenses for airlines.
When oil and jet fuel prices rise sharply, airlines face higher costs for operating flights.
Passing those additional costs directly to passengers can be difficult.
Airlines compete heavily on ticket prices, particularly on popular European holiday routes.
If one airline raises fares significantly while competitors do not, price-sensitive customers may choose an alternative.
This means airlines sometimes have to absorb part of an increase in fuel costs.
Why Jet Fuel Prices Have Increased
The Middle East conflict has disrupted energy markets and contributed to higher fuel prices.
Aviation is particularly exposed to energy-market movements because aircraft require large quantities of specialised jet fuel.
Unlike some industries, airlines cannot quickly replace aviation fuel with another energy source across their existing fleets.
That makes fuel-price volatility an important financial risk.
Higher fuel costs can influence airline profitability, route planning and ticket pricing.
However, a rise in fuel prices does not automatically mean every airfare will increase by the same amount.
TUI Uses Fuel Hedging
Travel companies and airlines can use financial strategies known as hedging to reduce exposure to sudden fuel-price movements.
A fuel hedge can allow a company to lock in part of its future fuel costs in advance.
This can provide greater financial predictability.
If market prices rise significantly, hedging may protect a company from part of the increase.
However, if fuel prices fall, a company may not receive the full benefit of those lower market prices for the portion it has already hedged.
TUI has provided details of its fuel-hedging strategy as it manages the current increase in aviation costs.
UK and German Bookings Show Encouraging Signs
Despite the uncertain environment, TUI reported improving forward bookings in two of its important European markets.
Booked capacity in Germany and Britain increased by 1% since the company's previous results update on August 12.
This suggests that consumers have not stopped travelling.
Instead, many may simply be delaying the point at which they commit to their holiday.
Overall reservations across TUI's different segments remained below the previous year's level.
The combination of these figures shows why the current travel market is difficult to describe with a single trend.
Demand Remains Strong Into the Fourth Quarter
TUI said demand remained strong heading into the fourth quarter.
This is important because travel companies depend on maintaining high occupancy across flights, hotels and cruise operations.
Empty airline seats and hotel rooms represent capacity that cannot usually be sold after the departure or accommodation date has passed.
Tour operators therefore need to balance pricing with occupancy.
Charging higher prices may improve revenue per booking, but excessive prices can discourage customers.
Lower prices can attract demand but may reduce margins.
Why Consumers May Be Waiting Longer
Several factors could encourage travellers to postpone booking.
Geopolitical uncertainty is one.
Consumers may worry about whether a destination will remain accessible or whether flight routes could change.
Household finances are another factor.
Higher everyday living costs can make families more cautious about committing large amounts of money months in advance.
Some travellers may also believe waiting could produce a cheaper last-minute deal.
However, waiting does not guarantee lower prices.
Popular flights and hotels can become more expensive or sell out as departure dates approach.
Could Holiday Prices Increase?
Higher fuel costs create pressure on travel companies.
If those costs remain elevated for a prolonged period, some businesses may eventually attempt to recover more of the expense through pricing.
But holiday prices depend on much more than fuel.
Hotel rates, airport charges, wages, currency exchange rates and competition all influence the final price.
Demand is also important.
Companies may have limited ability to raise prices if consumers are already cautious.
Travellers should therefore avoid assuming that higher fuel costs will automatically produce a specific percentage increase in holiday prices.
Why Package Holidays Could Remain Attractive
Package holidays can provide travellers with a relatively simple way to combine flights and accommodation.
Tour operators can negotiate large-scale contracts with hotels and airlines.
This may help them offer competitive prices.
Package travel can also simplify planning for consumers who prefer to book several parts of a holiday through one provider.
During uncertain periods, some travellers may also value having a single travel company responsible for multiple elements of their trip.
However, consumers should always check booking conditions, cancellation rules and applicable protections before purchasing.
Winter 2026 Travel Could Be Different
TUI expects later booking behaviour to continue into the new winter season.
Winter travel includes several different markets.
Some European travellers look for warmer destinations during colder months.
Others book Christmas city breaks or winter sports holidays.
Demand can therefore vary significantly depending on destination and travel type.
If consumers continue booking closer to departure, travel companies may need to adjust pricing and capacity more frequently.
This could create both opportunities and risks for holidaymakers.
Airlines Are Managing Capacity Carefully
TUI said that in some cases it had limited the number of flights available.
Capacity management is an important tool for airlines and tour operators.
Operating too many flights when demand is weak can reduce profitability.
Operating too few flights can cause prices to rise and may leave companies unable to meet demand.
Companies use booking data and historical travel patterns to determine how much capacity to offer.
But unusual geopolitical or economic conditions can make those forecasts more difficult.
What Could This Mean for UK Travellers?
Britain is one of TUI's core markets.
The recent 1% increase in booked capacity across the UK and Germany since the August update suggests demand remains present.
For UK travellers, the main issue may be deciding when to book.
Travellers with strict dates, such as school holidays, may have less flexibility.
Booking earlier can provide a wider choice of flights and accommodation.
Travellers with flexible schedules may have more ability to compare prices over time.
Neither approach guarantees the cheapest holiday.
What About Families Planning Christmas Travel?
Christmas and New Year can be among the busiest periods for travel.
Families often need specific departure dates because of school and work schedules.
That can reduce flexibility.
Popular destinations may also have limited hotel availability during peak periods.
Consumers planning a Christmas holiday should therefore consider more than the headline price.
Flight times, baggage allowances, transfers, cancellation conditions and accommodation location can all affect the overall value of a package.
Waiting for a last-minute deal can sometimes save money, but it can also reduce available choices.
Travellers Should Compare the Total Cost
A cheap advertised fare does not always represent the complete cost of a holiday.
Additional expenses can include checked baggage, airport transfers, seat selection, meals and local transportation.
Hotel resort fees or local tourist taxes may also apply in some destinations.
Travellers comparing packages should therefore calculate the total expected cost.
A slightly more expensive package may sometimes provide better value if more services are included.
Flexible Travel Dates Can Help
Travellers with flexible departure dates may have more opportunities to find lower prices.
Moving a trip by a few days can sometimes make a significant difference.
Midweek flights may also be priced differently from weekend departures.
Consumers can compare several departure airports where practical.
However, travelling to a distant airport also creates additional transport and parking costs.
The cheapest flight is therefore not always the cheapest overall journey.
Travel Insurance Remains Important
Geopolitical uncertainty highlights the importance of understanding travel insurance.
Policies differ considerably in what they cover.
Consumers should check whether their insurance includes cancellation, medical emergencies, travel disruption and other relevant circumstances.
Travellers should also review exclusions.
Buying insurance after a known event has occurred may affect whether related claims are covered.
Consumers should therefore read policy conditions rather than assuming all disruptions will qualify for reimbursement.
What Happens If an Airline Changes a Route?
Airlines sometimes alter flight paths because of security concerns or airspace restrictions.
Longer routes can increase flight time and fuel consumption.
In some cases, airlines may suspend particular services.
Passengers should monitor official airline information before travelling.
For package holidays, customers may also receive information directly from their tour operator.
Travellers should avoid relying solely on social-media posts because conditions and schedules can change quickly.
The Travel Industry Is Still Showing Resilience
Despite higher fuel prices and geopolitical uncertainty, people continue to travel.
TUI's forward-booking improvement in Britain and Germany illustrates that underlying holiday demand remains.
Consumers may change when they book, where they travel or how much they spend.
But travel continues to be an important discretionary priority for many households.
This resilience has helped the industry navigate several years of unusually difficult conditions.
Hotels and Cruises Diversify TUI's Business
TUI is not only an airline.
The company also operates hotels and cruise businesses.
This gives it exposure to several different types of holiday spending.
A traveller might use a TUI flight, stay at an associated hotel or purchase a cruise.
Diversification can provide different sources of revenue.
However, it also means the company is exposed to a wide range of costs and economic conditions across different countries.
When Will TUI Report Full-Year Results?
TUI is scheduled to report its full-year 2026 financial results on December 9.
Those results should provide a clearer picture of how higher fuel costs and changing booking patterns affected the company during the year.
Investors will likely examine profitability, booking trends and management's outlook for the next travel season.
Consumers may be more interested in what the results indicate about holiday demand and capacity.
However, company financial results alone cannot predict future ticket or package prices.
What Should Travellers Watch Next?
Fuel prices will remain important.
A sustained decline could reduce some cost pressure on airlines.
Further increases could have the opposite effect.
Travellers should also watch airline capacity, destination-specific travel information and exchange rates.
The British pound's value can affect the cost of spending abroad.
Consumers travelling to euro-area destinations, for example, may find their holiday budget influenced by changes in the pound-euro exchange rate.
The Bottom Line
TUI has narrowed its expected 2026 underlying operating profit to between €1.2 billion and €1.3 billion as the travel industry deals with higher jet fuel costs and changing consumer booking behaviour.
The company says geopolitical and economic uncertainty is encouraging customers to book holidays later.
Despite those challenges, demand remains strong heading into the fourth quarter, while booked capacity in TUI's core German and British markets increased by 1% since its August 12 update.
Overall reservations across the company's segments remain below last year's levels.
For travellers, the changing environment makes comparison and flexibility particularly important.
Higher fuel costs could place pressure on travel prices, but airfare and package-holiday prices depend on many factors, including demand, capacity, accommodation costs and competition.
TUI's full-year results on December 9 should provide more information about how the company and the wider European holiday market are adapting to these conditions.
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