As the end of summer comes into sight, it looks as if the UK’s overseas travel sector remains in impressively solid shape and particularly so given the country’s miserable economic backdrop.

There has been the odd bit of turbulence in the sector, of course.

Budget airline Ryanair saw its shares tumble last month after it revealed fares in its current quarter to end-September were set to be “materially lower” than in the same period of the prior year.

A couple of days later, sector stablemate easyJet presented what came across as a significantly more upbeat trading statement.

It has been fascinating to watch the return of overseas travel, and the strength of demand for it, in the wake of the coronavirus pandemic.

Pressure on household budgets has been intense. What is more, the UK economy has been going through a grim period for so long and the outlook is most unappealing.

READ MORE: Fife houses developer's 'varied journey' and major projects

Against this backdrop, the buoyant demand for overseas travel has appeared somewhat gravity-defying.

We should not, of course, underestimate the broader importance of a continuing bounce-back in overseas travel.

This is crucial to airports and the regional economies around them as well as to households and businesses, with flight connectivity key in these contexts. The rebound is also important in supporting the large amount of employment in the overseas travel sector, which was hit so hard by the pandemic.

So it was most encouraging this week, with much of the summer having now slipped by, to read an upbeat results and trading statement issued by package holiday giant and airline TUI.

While the higher prices being achieved by TUI may not be music to the ears of hard-pressed UK households desperate for a trip abroad and looking for bargains, they do highlight continuing robust demand.

And this should be good news for everybody in the longer term, in terms of maximising the rebuilding of connectivity. TUI revealed it had achieved record third-quarter revenues, and reported rises in prices, passenger numbers and earnings.

Ryanair’s results and trading update last month sparked much speculation about whether the overseas travel boom in the wake of the pandemic was beginning to cool in the teeth of strong financial headwinds.

So, for anyone worried about tougher times for the key overseas travel sector, there was much in the way of reassurance in TUI’s results and trading update.

READ  MORE: Ian McConnell: Good news for those keen to see Scotland flourish

TUI declared on Wednesday that bookings taken for summer 2024 had strengthened since its last update in May, “supported by accelerated momentum in recent weeks at robust prices”.

And its May update was solid enough.

TUI revealed this week that, following the sale of 88% of the season, bookings are up 6%, with the average selling price also ahead, by 3%.

And it revealed “early signs for winter 2024/25 bookings are promising across our source markets”.

TUI reported that it had, since its last update in May, added 4.3 million bookings, achieving a total of 13.3 million for the season to date.

It revealed that “the UK is 90% sold for the season with bookings up 5%”.

Julie Palmer, partner at professional services firm Begbies Traynor, said: “TUI’s Q3 results prove that the travel sector is more resilient than some corners of the market thought it could be this summer as price increases across the sector resulted in some weakness in demand.

“That’s not the case at TUI, where customer demand remained resilient throughout the period. This meant that even the airline division was able to offset increased input costs thanks to improved pricing and higher volumes.”

She added: “The travel sector's recovery trajectory is proving to be more of a steady climb than a rapid ascent, with consumer confidence and spending still regaining their footing in a world that has been reshaped by global events.”

The trading update from TUI was solid across the board.

READ MORE: Dundee Ford Centre launch by family car dealership firm

TUI reported its highest-ever revenues for any April to June period, the third quarter of its financial year. Revenues for the quarter were 5.8 billion euros, up by 9.5% on the same period of the prior year.

The travel group highlighted the fact that, during the quarter, 5.8 million customers travelled with it, up by 4% on the same period of the prior financial year.

TUI reported “a significant improvement” in third-quarter underlying earnings before interest and tax (EBIT) across all of its businesses.

Overall, EBIT in the April to June quarter was, at 231.9 million euros, up by 62.4 million euros or 36.8% on the same period of the prior year.

Derren Nathan, head of equity research at stockbroker Hargreaves Lansdown, said: “Nearly six million holidaymakers have propelled TUI to a record third quarter. The top line came in a little under market expectations, although operating profits surprised on the upside by around 15 million euros.

“The profitable growth was helped by solid gross margins and impressive cost control. The outlook for the key summer period now also looks positive, with bookings up 6% and prices increasing 3% on average.”

Mr Nathan offered an upbeat view not only of TUI’s trading but also of the travel giant’s resilience if things did become more difficult, while noting there was little sign of such a scenario at the moment.

He said: “The current valuation [of TUI] doesn’t fully reflect the current levels of strong trading, which now seem to have solidified as a trend rather than a recovery from the pandemic. Of course, concerns abound about the cyclical nature of the industry but TUI has a lot more flex in its capacity than it used to and for now there’s little sign that it’s struggling to fill plane seats or sunbeds.”

It seems that those consumers fortunate enough to have a choice in terms of their financial position are continuing to favour travel over other types of discretionary spending.

And this is playing a very important part in the comeback of the overseas travel sector and the rebuilding of connectivity.