Good morning everyone, and also good morning to the ones who are on the web. I've heard about 100 or even more, so I'm really very happy that you made the effort to come here and to be with us and to be on the web. I've seen, Nicola, you are really popular here with everyone. First thank you to you and your team for all the work. It's, we quite often underestimate how much work that is. We want to give you an overview about the Q4 of TUI, the year-end results, and also how we do see the market moving and how do we see TUI moving. We have. Now I have to see. This is too far away. I have to look here. This screen is not working.
This is the agenda for today. I would start with the highlights. Mathias will go into the details of the 12th month and especially of the fourth quarter. We will talk about the expectations for 2023. What are the short-term trends for winter we do see? What is the year, well, year expectations we have? I will give an update on the strategy. Where is TUI heading to in the next years? We have a special guest, Peter Ulwahn. He's the CEO. I mean, Mathias is known, therefore I didn't introduce him. He has been my successor first of October, and I'm very happy about that. We worked for 10 years together.
Peter is also new in the role. He has been with TUI also almost 30 years. He's the CEO of Musement. As Musement is extremely exciting for us to see, we thought it is interesting for you to hear a little bit more in detail. Is the microphone? It's working. More details about what we do with Musement, how we do see the future of Musement. Oh, this screen, it doesn't work as well. We are very pleased about the year-end result, especially the fourth quarter, after a very, very difficult start. six months of pandemic, third quarter ramping up, and now the fourth quarter where we had seen that we are almost back to normality.
We are very happy, and Matthias will give you some more details about the agreement we were able to get with the WSF. That will be a major step forward for TUI and making TUI a very normal on one hand, but also very successful company in the future again, and you will hear more details in the past. Having said, the restart third quarter was a challenge. I mean, it's always amazing if you come from almost zero to normality. A lot of things means challenges and also lot workload for people. We were able to deliver a very strong fourth quarter. I said almost back to normality. Customer levels at 93% and airline load factor 92%. This shows that we are almost there where we had been pre-pandemic.
If we wouldn't have had all the disruptions at the airport, we would have been above 100%. We could see when the airport disruption started here, especially in the U.K., there was less momentum when it came to last-minute bookings. The Q4 above EUR 1 billion, if we take into account the disruption costs, and these are only the direct disruption costs, there have been also indirect disruption costs, then we would have been above EUR 1.1 billion. Hotel doing very well, EUR 300 million almost. The 5th consecutive profitable quarter and above 19 levels. This is amazing how resilient and good the business is. Cruises returned to profitability, EUR 100 million. That went pretty quick. I will give you later on some details.
If you now see where they stand today, we are also almost back to normality. TUI Musement, of course, they benefited very much from the strong increase of passengers from the Markets & Airlines. They're also, the new business part where they sell direct to customers has developed very well. The traditional part is doing well and the new part is accelerating well. Markets & Airlines, for the first time after 2 years, 2.5 years, are back into positive territories, EUR 600 million. It's a good result for fourth quarter, where it was a lot of ramp up still. That led to a group result after minorities of EUR 800 million, which underpins the strong summer.
Operating cash flow EUR 1.7 billion, of course, very much supported by the working capital build up customer payments, but also less payments to hoteliers. Therefore, net debt is decreased significantly and the liquidity position was very strong and is even in the typical seasonal swing very strong. If we go into the details, which I almost did, hotel almost EUR 300 million. Load factor or occupancy 92%. This is one of the best load factors we had and really shows how the model works well. Average rate EUR 80, 10% up which covers all the cost increases we have seen. Cruise, EUR 100 million profitable. Occupancy 80%. You know, historically, we had been 102%. We are nowNot only on the way. It's amazing.
Very short-term business, but that we come close to the historical levels. TUI Musement, 3 million experience sold, 11 million transfers, EUR 40 million profit. Two sources of profitability. The customers which came from the markets and also the business, the generic business they have built up to sell their excursions also to new customers, which is very important. Markets & Airlines, EUR 600 million in total, EUR 344 million from the U.K., Ireland and the Nordic states. A real big change to the year before. Load factor 91%. Also getting close. I think in summer we had sometimes 95%, but it's getting close to that. Central region doing very well. Load factor 95%. A lot of the things we present in our growth strategy we had started three, four years ago in Central Europe and Central Europe was always weak on profits.
What you do see is that there is a change, quite considerable change, there. The Western region, 130 million load factor below 90, 89%. That is probably at the moment, especially in Belgium, the most difficult market or the more challenging market. Why? You know all the limitations on Amsterdam. Therefore Holland is doing well, but the overcapacity went from Amsterdam to Brussels and therefore it's more competitive than we were used to see there. We did very strong progress on our digital platforms, I think we now also introduced the view on our app bookings. The share of online bookings is now above 50, U.K. 70, Nordic is even 80-90, and Germany is 30%. Two things are important. One, it's not an or strategy we have between retail and online.
It's an and strategy. Because we do see the value of strong and good retail partners, and through retail, the customer will get a high margin and early 08326 Simbe Cynthia -6 . It's always important for us to say it's an and strategy. When it comes to online, the focus in future will be app centric. Because we do see a lot of benefits, if we are with the customer, with our app. Two-way communication, bringing all the offers to the customer, and using all the directional things we can do through the app. Therefore the focus is to really become app-centric and what it means we will give you later on some more information.
We doubled the sales through the app, which sounds terrific. If you look at 3.4% and if compared with best of breed, you know what big potential we still have. Therefore the focus for the coming years is to really become app-centric. The customer is using almost three quarter of the customers are using the app for service to get the booking confirmation, to do the check-in, to get information when they are traveling, also to book Musement excursion. It's good. People are getting more and more used to using the TUI app. Now it's the task to make it also as a sales app. If you look at markets are different. Some markets, the U.K., are better than other markets.
If we compare with the best of breed, there is a way to go and we want to close this gap in the next 12 month. With the app, the customer satisfaction index is also good. There's always room for improvements. The best are probably around 8.5, but to have eight or 8.1 is a good starting point. For us, yes, retail is important online, but the focus is on becoming an app-centric company like Booking.com is or others are in other sectors. Sorry. If we look at the full year results, EUR 12 billion more revenue to 16. Still a way to go till we are at pre-COVID level.
On the other hand, I think that makes it quite clear, and most of it came through the end of the third quarter and the fourth quarter. The ramp up for a company like TUI in the value chain has been a horrendous effort. Yes, some things didn't work as we would have loved to work them, but I think it's amazing achievement, which is especially we can be very grateful with our employees who worked sometimes double as much as they had because the reps from the U.K. couldn't go due to Brexit to Spain and so on. EBIT, Holiday Experiences did do very well. EUR 1 billion improvement. Markets & Airlines now at a break-even level with EUR 1.4 billion. There you can see where the benefits, the improvements will come from in the future.
Yes, we also want to increase the Holiday Experiences part. Cruise still has a way to go until they are at the historical level. In Markets & Airlines, there is the biggest potential now for getting into strong profitability, ending up with EUR 400 million profit and which is maybe even we fulfilled therefore the target to be significant positive.
What is even more important is that we are well positioned for growth into this year and we're, I think, which is even more important that what we do now and we were able to do now should lead us to a, I shouldn't say different because we're still building on the, on the strength TUI have, but it will be to a very advanced, more advanced, TUI in the coming years. Before I talk about, and I love to talk a lot, about the strategy, Matthias will go into the numbers and give you some details there also about the measures which are planned. So you are doing the number parts, I will do later the fun part.
Perfect. I have my own clicker, so. Thank you. Good morning also from my side again. As Sebastian, as you just said, I'll cover the results 2022. I will cover also what we did on the intended capital raise, and in particular, the repayment of the government funding. Now, before I go into the details, thank you very much for your understanding and also compliments. When we were in the media calls in the breaks, I scanned through some of the reports already. A lot of you already covered and captured what we announced yesterday night. I, and we, fully appreciate all the hard work that went into all of this. I mean, it's probably the same for us, given that we have a year-end, and then on top we do this agreement with the government.
Of course, it's really tough for all of you, so, highly appreciated that you are here, that you are on the call, and that you cover us in and with these agreements. Now, looking back, and Sebastian, you mentioned it already, how was 2022? I think for us, in particular, important, the Q4. 12 months ago, we were not really sure. No one could really be sure whether the company would be there with these numbers, EUR 16.5 billion of revenues, EUR 400 million of operational EBIT, a cash flow north of EUR 1 billion, and a Q4 result close to historical levels. I think 12 months ago, we still talked about Omicron. We were unclear when it would really happen, Easter business unclear.
Then only in the third quarter, the last one we reported, we had the ramp up, and we actually came to something where we felt, okay, operational, we are back. Operational, you could see that our customers were traveling, but now these numbers, they show we are financially also where we wanted to be. I think, this morning we said, Sebastian, when we looked at these numbers pre-summer, what we expected, what we wanted to achieve, like carve out the disruptions, but these numbers are actually within what we wanted to achieve. That's really good. Also good to see that the balance sheet followed that.
With the leverage of 3.4 net debt and the resulting covenant test of 3.2, I think this is all in good order, and I think this is a very good basis to think about now what is the next step, how can we grow the company, and Sebastian will elaborate on that further later. Peter will also show what we've developed over the last years in that Musement, but I think this is a sound foundation. Very importantly, now to have the agreement with the WSF, of course, opens a lot of opportunity for the balance sheet as well, and I'll talk about that in a second. Now, just quickly on P&L, cash flow, and balance sheet.
I think on the P&L, just to highlight Q4, if you take the disruptions out, you would be at something around EUR 1.1 million, really close to what we were historically, what the kind of full potential of the company is. Please remember, for instance, Cruise still in the ramp-up. I think, Peter, your activities amusement also in a ramp-up. There, but not yet fully there because just of the timing. I think this is something that shows foundation is there, but our ambition goes beyond that. In terms of the details, to the P&L adjustments, net interest, they're all within what we thought and what were our modeling assumptions. Also tax, because we then, of course, in the fourth quarter, started to pay tax where we do have profits. Overall on net interest, quite a high number.
There's a lot of one-offs included there, something like EUR 50 million-EUR 75 million, which comes from the handbacks that we had with the state in 2022. However, I think the number overall is still elevated due to COVID and due to COVID debt. In terms of the cash flow, I think the elements are also something that you probably have expected and which are in line with what we reported already. The strong flow back of working capital, the strong management of working capital is a key driver. EBITDA of EUR 1.2 billion, that's in line with what we actually wanted to achieve in order to meet also the stability on the covenant side. I think this is all also in good order. In terms of what you see, what you don't see is, of course, dividends.
I think from the joint ventures, they will need the same time like we to recover fully financially so that we get these dividends, for instance, from TUI Cruises, which prior to the crisis, was a substantial contribution to cash flow in the past. As a result, the balance sheet, as I said, looks solid. I'm quite happy with that. EUR 3.4 is a good number. Also, the gross financial debt has significantly improved. What you don't see here, because it was accounted for as equity, is the silent participation tool that we also repaid over the summer. That's EUR 0.7 billion. If you look about the, on this reduction of net debt compared to the year before, this is something that I also take into account myself.
We talk about something north of EUR 2 billion that we actually have improved over the last 12 months. I think that's really significant. As I said, I think this is a good basis to grow the company now, and in particular, to do these next steps on the capital structure. Just as a note, the RCF was drawn, something like EUR 6 million KfW was not drawn as balance sheet date. Of course, this is prior to the seasonality, and we'll come to that in a second. How much we will draw then KfW over the winter is something we'll have to look at. We monitor, of course, very carefully. On that basis, I think that's also an ingredient for the then following capital raise. I think I'll skip my priorities because that's very clear. Discipline, financial discipline.
I was also happy to see that Sebastian also mentioned cash flow discipline, you mentioned that later in your slides as well. I think, please be ensured this will be a top priority going forward. Coming to the agreement with the WSF, I'll hand over to Sebastian on the current trading. I think I'm really pleased with this agreement. I'm really happy. It addresses two things. When I look back at our meetings over the last 12, 24 months, there were always two questions. One, when is the state going to convert? What are you doing with the situation? What will actually happen? How long will they stay in the shares? This is addressed. The second question that is always, what about the balance sheet? Do you think the leverage is a good one?
Can you not aim for a lower leverage? This is also addressed with this one. There are two components, and one component is, of course, this very clear payback of the State. To remind you, the State always had the right to convert the EUR 420 million of Silent Participation and the EUR 59 million of bond with warrants at EUR 1 any time. They could have gone in for EUR 1 and half the share price of EUR 1.70 currently, it was yesterday, as a result. With this agreement, what we will not do is, we will not take away this benefit that the State has as a result of the package for supporting the company during COVID.
What we do have, however, is, one, that we do it at a current share price level, lesser discount, so it is 9.3% less compared to the current share price level. Secondly, we can do it now. I think that's a really great benefit because the state could have done it later, could have done it at the wrong moment, could have done it not related to anything else that we wanted to do. I think now we have clarity. We can do it in a structured and ordered process, and we have 12 months in order to implement all the necessary steps. I think this is the really good thing when I look at this agreement. One, the current share price level minus the discount. Second, we can do it at the current share price level.
We can do it in a controlled manner. Also, we hand it back to shareholders because through the rights issue and protected by subscription rights, they can do the funding. Rather, the shares go to the market, and this is kind of outside our shareholder base. I think that's one component of that. It's a bit replacing what would have happened anyway, which is the conversion by the state, by a rights issue from our side. The second component of the rights issue will be to address the balance sheet. We've received a lot of comments on that over the past. I think we've done our own analysis. If you look at our balance sheet, 13th of September, this looks solid. It's in line with what we have had historically, albeit the mix is a different one.
What we said is the second component should be similar size to what we pay to the WSF. What could that mean? Apologies, it's a bit early now to really go on numbers because we've just found the agreement. We need to go through an AGM. Then we can do the rights issue. There are a lot of determinants to say, you know, what could be the right value. How would I look at it? We pay back the state with something like EUR 0.7 plus interest. We could say it's EUR 0.8 billion. Similar size could be EUR 0.8. It could be a bit more. It could be in the one or the other direction. I'm not sure the mic is still on. Can you just check? Thank you.
This gives you a bit of feeling what we want to do. How is the second component going to be determined? As I said, KfW is not drawn per September, but will be drawn over the winter, and we want to have a look how much do we want KfW to be there. We want to redeem it over time completely. I mean, this is a clear target, so we need to rightsize it. This issue is the final one, that this issue is the one which creates the clear pathway to the full exit from the government. One is very clear. It's the WSF. As currently, the price is EUR 7.30, and I come to some details in a second. The second part is then how much do we raise in order to redeem, replace KfW facilities. Now, what are certain details?
The price of the government can go up. If our share price develops in the right direction, government will participate. There's a cap of EUR 2 that could result in a maximum of EUR 1 billion that we pay to the government so that they don't convert. Second, we have time, 12 months, as I said, until the end of next year, to accomplish this. Third, how do we accomplish it? We will go to our shareholders in the AGM to vote for a share consolidation. This is very technical. It's very legal. Commercially, this is not effectively relevant for the issue, but it gives us much more flexibility going forward. This is something we want shareholders to vote on.
Secondly, the EU will need to provide comfort that this early repayment is in line. I think these are the most important ingredients to the agreement that are relevant. There's a lot of technicality also in here, but I think commercially is what we want to do. Use the opportunity to repay the WSF in a controlled and structured manner together with our shareholders, rather than having them convert maybe at the wrong moment and to give these shares into the market maybe at the wrong moment, and at the same time finally address the balance sheet. Sebastian will elaborate on that in a second. I think there are a lot of growth opportunities, and I think we want to have the right balance sheet at the right time rather than to wait too long and then forego opportunities that are out there.
In terms of the details, I just mentioned we need to go to our AGM in February, so we'll incorporate all of this in the invitation, which will go out early January to shareholders. A question very naturally is can sanctioned shareholders participate? What will happen? Our understanding is sanctions are very clear. We cannot communicate to sanctioned persons, sanctioned individuals, and our sanctions individuals or shareholders are not permitted to participate in such capital raise. I think overall, as I said, I think this is a very clear opportunity to do the right step at the right time to address the balance sheet and to solve the situation that we have with the WSF.
I'm really, really pleased that we could find such good terms with the government because in the end, a lot of changes against the original agreement are now incorporated in this negotiation. I think if we manage to do that, we can do all the things that are summarized on this page, which is growing the company with the right balance sheet and taking part in all the opportunities which are out there. I think this is something, and it's good that you are there, Peter, because that the two of us cannot only have a discussion about where can he save, but maybe a discussion where can he grow and he gets a little bit of headroom.
I think to do the rights issue then at the right time will actually provide us with the right kind of tailwind that we can have in this 2023. Sebastian will talk about it now, what is the environment, because I think the solid environment of 2023 will give us the right time to do this, to prepare and then grow further going forward. You have your own clicker.
Yes. Thank you, Matthias. Thank you very much. Expectations about 23, I think I would like to draw a picture with two views. One, I think it would be unfair not to see that the market is challenging. I mean, if we would think everything is fine and will normalize, I think that is not the fact how much impact of economy we will see and sentiment on people we will see. I just said in one of the talks before, in Germany, the sentiment is by far worse than the actual situation. We do see inflation will come down. I expect half of the inflation next year than this year. There will be a lot of good momentum. No one knows how the economy will be.
On the other hand, that's maybe the picture where we have to be cautious. On the other hand, we do see that the trend to travel is there, is strong. The ones who have the disadvantages of the economy, of the cost increase are unfortunately, or fortunately, very difficult to say it politically right, are not the ones who travel with us. All the burden goes to the poorer people, not to our target group. Second, if the market is challenging, we have to be better than others. We have to be more agile, and that's what we do see at the moment, that there is strong momentum in what we, what we do. On one hand, we are cautious. On the other hand, we do see the opportunities of the market.
To balance that out is really, really important. The target for 2023 is very clear to have a very solid and good profit. You know about the strength of TUI brand, our customer offer, the business model. I will tell a little bit later more about the business model and what really was important during the crisis that we right-sized the airline and that we reduced commitments. Because what we had learned is if you highly leveraged demand to own supply and there is a reduction of 10%, you really go into hundreds of millions of losses. To have more flexibility is really important. What did it mean? We were very oft at the upper end of the capacity we would need for winter. In summer, we could fly all the aircrafts.
In winter, we had a lot of aircraft which we could not use or only loss-making. Reduced the fleet to a capacity which we can use year-round. The question quite often is, what do you do if there is a peak in summer? There's enough capacity, especially in Central Europe. It's a little bit more difficult in England to get the capacity. That's why the reduction has been stronger in Central Europe than in England. Reduce hotel commitments and prepayments. Prepayments, that was not so difficult because we were one of the very few one who fulfilled their commitments. For the hoteliers, it was good to see that we can fulfill the commitments. On the other hand, we said we want to reduce the prepayments.
Similar to the commitments, we really focus on the value creating hotels and less on the broad range. What, of course, has been also important that we reduce our general spend by EUR 400 million. By the way, this is a work which we do every day. It's not stopped now because we have achieved the EUR 400 million. Because the inflationary impact is strong, and therefore, whatever we can reduce in cost is important. How does it look like for winter? One thing, the trend, it's not a trend anymore, the situation that people book later is very, very strong. I mean, when will it normalize, and will it go back to 2019 level? It will normalize. Will it go to 2019? Maybe, maybe not. Depends on products. For the branded product, yes.
For the mainstream product, probably it's more difficult. What is different to the past is that prices are stable and margins are stable. In past, when there was a short-term booking trend and normally over capacity, low margin, that is different. If we compare where we had been in September, where we stand today, we have 84% is the cumulative book position compared to September, 6% compared to 2019, 6% up to September. If we look at the coming weeks and month, we are very close to where we had been before. Let's say March is still a lot away to go. It's interesting question, is there a break in the trend or will it stay?
For the time being, we don't have an indication that this should end this trend. As I said, it's very different. If I look now at cruise, we. Huge improvements also from September to now. It's all short-term for. Not all, significant part short-term with good prices. We also see in cruise, which had been the longest lead time, that people start to book one year ahead, one and a half year ahead. With the branded product, it's coming back. Average price 28%, compared to 2019. What is maybe. Sorry, I forgot one thing. If you look at the last four weeks comparison, we are almost at 100%. That shows the short-term trend. Prices, compared to last year, 7% up. This is slightly below the inflation trend.
In October and November, that has now changed again. Why? We had the strong decline of the, or weakness of the UK pound, we had significant increase of fuel prices. As we were just now more and more in the situation to hedge, we were hit by this effect in November. That's why we were not 100, or will not be 100%, covering the cost increases. That will be very different in the second quarter. There we will cover the price increases very much by the 7%, 8% we will see. It's good news that prices are stable. If we go into the details, hotels and resorts are booked very well. On a strong winter, even stronger.
We're a little bit suffering on having a little bit less capacity. For example, we are rebuilding a big RIU hotel in Mauritius, which we tear down, we increase capacity. There is a slight increase in capacity because of renovation, but that is only a temporary effect. The occupancy is at 9% higher, 57%. Rates are doing very well, we are benefiting that long haul to the east is still not really possible or easily possible. Where we are in our destinations, we benefit from there. Cruise, a very strong increase in occupancy. In the fourth quarter, we were around 80%. Historically, we would be at 102%. We are getting now close to the 100% again. It's amazing. Little bit...
That was the one which surprised me more. The ticket rates are also good. Good development. Musement, Peter will give some more information. A very good development, which is good that Musement not only benefit from the higher number of customers, but also that is always where we look at it, how many of the customers who travel into the destination will book an excursion. We had targets of coming close to 35%-40% of the customers. In the beginning, we were at 20%. Of course, people didn't dare to go on an excursion. Now we can see also to a lot of changes, we are coming very close to what has been.
Which is maybe even more interesting is the part where Musement, Peter's organization has to get new customers, and there we are doing very well. This is important for two reasons. One, it's important for Musement, but these are all customers which were not in the TUI ecosystem. When they are in the TUI ecosystem, app-centric, we can sell all the other product. Modeling assumptions. Before I do it in old habit, you should do it.
Indeed, very quickly to what does actually that translate into on the financial side. I think if you look at the overall environment that we are in, this is probably not the right time to be very precise on our guidance.
Of course, the ambition and revenue in EBIT, the two key KPIs, is to be significantly above last year. If you think about what Bastian showed in the beginning, that not all entities were operationally there where we wanted them to be, because we didn't have a winter, Omicron. We did only have the ramp-up in Q3. I think this should give you an idea. Q4, we did in today's environment, and I think this should be a bit our benchmark. This is where we want to be, or for the full year. The rest of the assumptions, we've outlined here, adjustments go down a bit. Interest is a bit higher than we probably would have expected 12 months ago, with the 410- 430. We've seen quite some rate increases that translate into higher costs for our.
Revolving lines with the cash with the banks and with the KfW. At the same time, we see also on the lease side, dollar has strengthened, so whenever we pay dollar interest, that's a bit higher. This is reflected here. Net investment is more or less there. It's back where it's depreciation prior to IFRS 16. I think that's more or less a solid number. This also reflects effectively that we will see investments in the hotel area, and particularly from RIU going forward. You've seen it also this year that they came back much quicker than hotels were already on 2019 levels, already beyond 2019 levels. I think these numbers, they reflect what you see also on the investment side.
Last point, I think on interest, I mean, again, this is also a reason to address the balance sheet because if you think about it, if we replace the facilities with KfW more with cash, that helps us through the winter, less interest costs, but also through the summer, where we draw the cash ourselves with our commercial banks. I think that's then will have a quite good impact on net interest. Again, a bit early to talk about, but these are the things that drive us when we plan then for the eventual capital raise later in the next year. I think that's from my side on 2023, and I think it's now strategy going forward, Sebastian.
Yes. I would love to give you more numbers. By looking at Nicola, I don't dare to do so. I think what is important for us, all the measures we will discuss now should lead to significant growth. In this year, it should help us to achieve normality. In the future years, it should. Because the market is challenging and probably not as strong as we would like to have it. In the years after, we should really see incremental, significantly significant growth. The good thing is that the megatrends are still solid, valid. Every market research shows that, yes, there is a dip due to the macroeconomics, due to war, to this and that. The fundamentals are good. We also put the point experience into it.
Why is it so important for us? It's a growing market. It's a non-consolidated market. We are well-positioned being one of the number one, two, three, and we can lead product consolidation. We can lead in conquering new markets. It's so important for the decision of the customers who wants to go with a package that they decide where I can get the best diving, where can I get the best skiing support, and so on. What are our... We should change that it's not the CEO priorities, it's all our priorities in the management team. It's one, to grow market share, to grow profitable market share in what we do today. I mean, we do see markets where we do very well, and then we do see markets where we're doing okay-ish.
We have also markets which are turnaround markets, like Nordics. By the way, it looks like we have achieved that. Which were a huge loss-making last year and which we want to turn around. There we have per market decided for a plan how to turn it around or to make it more agile to gain market share. Second, new products. Very important. If we have I always give the example, if you go to a grocery shop and you have three sorts of milk, you buy it. If you then find oat milk or soya milk, which has not been before that, you buy this incremental in the same supermarket, you don't go to another one anymore. It's a little bit with TUI.
We want to get new customers which have not been part of the TUI ecosystem, and therefore Musement is so important. This all based on a very strong focus on quality. We lost, the sector lost a lot of quality during Corona. We probably have done better than many of the competitors, but we are definitely not there where we want to be. Sustainability, we do see as a opportunity, not as a threat anymore. First, we think it's, by the way, not only morally the right thing to do, it's important for the sector to do, it's important for TUI to do it, the front runner, to be really setting the benchmark, even if it costs some money, because we think it's also commercially sound to do it. Last point, it's on people.
I mean, after Corona, including ourself, we were quite tired. Now we have, through different measure, energized the team. I think it was pretty easy to achieve this energizing. The more difficult challenge is to keep the momentum, to keep the speed, because we don't want to be a Behörde, a authority. We want to be really entrepreneurial and to get things done. Not to analyze, to get things done. Therefore, we have to work a lot and to support a lot our people. This is something which is crowded, but for me, always very important. 20 million customers before Corona. Now 16, we are back. We'll be back to the original number. We want to increase this number significantly with new customers in the different segments.
Which means that in the funnel model, we have more customer which we can steer into our asset, which still has opportunity that we can optimize the 1% or 2% occupancy. We can optimize the yield. What is more important, we have now a model, asset light model, to grow with hotels, to grow with ships. The bigger the distribution funnel is, the better we can fill this. The clear target is to grow with hotels, asset light, asset right. This is very much supported by the increased number of customers. By increasing the sales funnel, it means that we increase flexibility, we reduce significantly risks, and we increase, as I said, occupancy and risk. If we come from the assets, it's just the other way around. The assets should support TUI because they are unique.
A RIU hotel you only find with TUI. The ROBINSON Club you only find with TUI. Magic Life. We are building on these TUI BLUE, on these strong brands, management models, franchise models, this then supports why people should go to TUI. It's in a two-dimension supporting the profitability. Market and Airlines. How do we want to grow the market share? One, we said on the wholesale package, the traditional market, we want to be more agile. We want to be a good competitor, a better competitor. The best of breed are the ones against whom we want to win. If we go into the dynamic package, which is bigger than the wholesale package, we are hardly there. For the customer, it's the package.
He's not so much interested, is it produced A or B? We have a very low market share. The only market where we have a significant market share is Germany. Germany now market share, which is really doing extremely well. If we say we have 25% is out of this is dynamic package, you know that we are there between 5%-10% to be a little bit precise. That we have built up in recent years, recent month. Half of these 25% are new customers to TUI. That is something which we now will roll out in the next 12 months to other markets. Accommodation only, very similar. Belgium, we have 5%, and the other markets, we have 1%. Very, very low number.
We do see it's a very profitable risk-free business. Why shouldn't we get at one stage a fair share in this market? It was not planned, but I just got the message that we rolled out accommodation only in Nordic today. It's working. It's selling. It's the first market we do it. We'll take another 12 months before we have... on all the other market. It's great that it's working, that people find it, people buy it, and it's important element. It's all under TUI brand, and it will work well. If flight only is maybe something which is profit-wise not really so important, low margin, but people buy flights more often. It's a way to communicate more often with the customer.
Very strong focus on growing market share profitable in the wholesale package area by being more agile, more competitive. Also using more partners. We have agreed a very good package with the plan with the U.K. management, and that is really exciting. Dynamic package accommodation, flight only, car rental, very important. Germany, very strong, but we have this product now in any other market. Experiences Peter will talk about. Tours, that is something which, especially in the Southern European market, is very strong. In Spain, EUR 1 billion market, Italy. We have just. That was the 2nd product we brought in the market a week ago, implemented this in Belgium and Holland, so that you can book dynamic tours through Florida, through Europe. Very interesting. This is source of growth.
On the Holiday Experiences, it's slightly different. All the growth is in asset right, asset light model, it will and support the growth of the market, of the tour operators, of the market and sales organizations by adding great products to it. Asset TUI Cruises will have in 25, two ships, in 26, another ship, so three new ships. It will be very unique, especially the last two ones, and that will lead to higher profitability. They're supported by our distribution strategy. Hotel, very similar. We are rolling out the TUI BLUE brand hotels to other destinations. It's doing very well. They have built up a strong distribution, also accommodation only, direct sales activities.
We do see that the partners are happy, we are happy, and it's more the question how quickly we can scale it up. Last but not least, the Musement part, which Peter will express. When we say we do it asset right, there are different sources. The hotel fund, the JV companies we have. The one or the other we will develop on our own, the one or the other we will sell. The number of projects, of hotels, of ships will increase. Whatever we do, it should be scalable. That's why so much effort on the TUI BLUE brand. By the way, we will add the hotel portfolio by the one or the other incremental brand all about TUI where we have not been strongly in.
TUI SUNEO is a new product now really scaling up in also in the source market like Germany, not only in Spain. This is a three-star club. Not club in the British sense, but in the European sense. Family resort, product market segment where we haven't been really in. If you look at the TUI market share, it's big in the four or five-star segment, 30%, 40%. It's 10% in the three-star segment. What does it mean? We have the TUI Heartland products, Sun and Beach wholesale, and the great hotels and cruises. Now we add this with dynamic package product, weekend trips, or just you go somewhere to stay in a hotel. The experiences and the tickets, the ticket also for theater, for museum, and so on, something you can use every day.
You are probably not much aware of what Musement does in England or in Germany because Musement is a Milan-based company. What GetYourGuide is in Germany, Musement has been in Southern Europe. Now we're bringing the content, the German, the British content onto the system, and we start the marketing so that in the medium run, the position should be as strong here in Germany as it is in Southern Europe. What does it mean? One is the product side. On the other side is the focus on customers because you can build a lot of products. If you don't have the right customers, you will not sell as much as you want.
Of course, we want to keep and to build on the loyalty of the smart tenners, the home away, the senior people, the ones who have a budget with families, who wants to have the all-inclusive package and so on. This is important. Whatever we do, it's not an or, it's an and. We want to get the energized adventurers, the travelistas. The market is as big as the other part and to get these segments with our products into the TUI ecosystem and by adding the products, by doing different marketing, different market channels, and it seems to start to work well. Very clear, focus to keep good customers we have and to get more customers in other segments by targeting very clear.
What is really important is to bring whatever we have in the central customer ecosystem of TUI. That is something we haven't had. What we do now, and I should have said it before, we really prioritize what we are doing. Very few projects, and these we want to deliver. Dynamic packaging, echo only, and the customer ecosystem. All the other 100 projects we don't want to do. It's just about delivering that. What does the ecosystem means? It means that the customer is in one system where he has access to all the TUI products with one customer account, one payment system, one loyalty program. I mean, if you look, you could ask why it's so extraordinary. Aqua has it, Hilton has it.
Aqua probably for me is the best and gives a great standard, but in tour operating, it's not yet there. It has not been there with TUI. In 12 month, we want to have this ecosystem which is very much focused of being app-centric. Because with the app on the phone, on the mobile phone of the customer, you can be in contact, in communication with the customer very often. This allows us to have CRM vouchers, strong communication, marketing, a campaign. It also allows the customer to interact with us on a more regular basis on service, on questions, on bookings, on new bookings, and so on.
We do see that some markets are more advanced than other markets, this is what we do now to create 1 customer account, one payment system, 1 loyalty program. It's clear that it's not against the retail. The retail will get all the products we have. If we look forward, it's not about web. Web is also important, but it's about the app business. At the end, this is the cheapest way to the customers and the most intensive way to the customer. Overall, there are 3 functional tasks. 1 is on quality. We have started to look every Tuesday evening on the quality scores throughout the company. We know that we are not there where we had been pre-COVID.
It was probably 10%-15% higher in that promoter score. We want to get there again. We know where we have not been good. When you talk about the disruption, there are competitors with own people who did it better than we. We know that on spare parts of our dear friends from the app aircraft supplier was not as good as we would have wished. A lot of effort to get the right access to spare parts, and so on and so on. There we do know what we need to do because you can have the best services. If a plane is late for eight hours, the customer is annoyed. Whatever people do, they can maybe smooth it down. People are annoyed.
Customer satisfaction with 8.4 actually is very difficult to increase further. 8.5 normally is something where it stops. There we are happy, but the NPS, in all the different areas, is it retail? Is it online, app? Is it service? It's airline. We measure now, and we want to be best of breed. There is one company who is on the same level as we, who is the benchmark and who has also developed very nicely in the world, and that's where we want to get and hopefully to get even better. Sustainability, very important. To us, We believe that, you know that we are part of the Science Based Targets initiative, where after a very tough process, our targets will be acknowledged and certified.
Our ambition is by far stronger. Our ambition is in 10, 11, 12 years to be carbon neutral, to really be the market leader of what we do. In some areas, it's easy. Our new head office in Hanover will be carbon-free from next summer onwards. On hotels, it's more flies of carbon, more question of how much work you put into it, solar panels, all the other activities to reduce it. On airlines and on ships, it's more difficult. We're now in the process of changing the engines that they're able to, till 26, can run with methanol, so hydrogen derivative. We have joint initiatives on the fuel, green fuel. There's a deal with Cepsa more to come. We want to really secure the delivery of green fuel.
By the way, it's more than fuel and carbon-free. It's also about social environment, supporting the local community through local marketplace. This is supported by the Care Foundation, and it's also supported by our CoLab and Roads, where we really, in the next seven, eight years, we want to bring everything in reality, which should be then in others five years later. At the end, we think it's a commercial sound target because what you don't consume, you don't have to pay. We know that the regulation will be stronger and stronger, and we know that customers are in a limit, we have clearly to say in a limit, to pay for it. I mean, the enthusiasm is getting smaller if the increase is too big, but a portion they are happy.
To do it, we want to be the market leader in sustainability. The last point, which is maybe the most important is our people. There was a nice claim which was initiated by our HRD, Sybille Reiss. Let's TUI it because we want to combine it. Let's do it. Let's put it positive. There's a lot of improvement to get things quicker done than in the past, and we want to do it in the right TUI way with the TUI values. This is a shift or partly a shift in the momentum of the company, and for that, we need more talent to get into the company to promote them. Has a lot to do with diversity. That's not man and woman.
It's old, young, Chinese, Japanese, Spanish, Swedish. To bring the best people together. It's about I don't know if there's an English word for spleen. Everyone has his special specialties, and we are better as an organization if the different specialties everyone has are brought together. Leadership, really to focus on execution. Just do it, and not to discuss too much, but just do it. To take the risk, to execute, and to take decision where you haven't been aligned with 100 people to do it, to get higher employee engagement. I give the example of the two things, tours business today echo only in Nordics. We see a significant higher momentum.
It will be a change of transition this year till 12 months till we have everything in place, but we are very focused on the execution of the five, six, seven. Yes, this should lead us to a more attractive company for customers, for employees, and therefore also for shareholders. I have a soccer background. That's why I love the sentence, which is proper English I heard, "We are playing to win." That's the motto we have. That's what we want to prove to our investors in the coming years. Before we go to the summary and Q&A, it's Peter to give us his view on TUI Musement. Maybe if you allow me a few words. Peter has done the whole career from the scratch, which is really amazing.
Whenever I said I'd been to Trivandrum, you said, "I have been there. I've worked there as a tour guide." You have gone through the Nordic market from the very early to the top, and you're since 22, the CEO of Musement, and one of the people who are very strong in execution and motivating people. What did you do? What are you doing tomorrow or today? Muse, news muse?
Muse news.
These are the things where TUI can learn a lot of, in the positive, bring people together, entertain them, making them to go the one step ahead. That's why we are so proud on you people, on what you do, and what you have achieved and what you will achieve.
Thank you very much, Sebastian. Thank you. Hi everybody from me as well. Really excited to be here to give you a bit of insights into the magic of TUI Musement. I will give you a bit of a crash course on what we've been doing in the last couple of years, and hopefully you will be as excited as I am around the potential that we have. Allow me to give you a little bit of detail what we are. Simplistically, TUI Musement is the part of TUI that manage the in-destinations things, with the exception of hotels and cruises. We do three things. We do experiences, as Sebastian has been speaking about, and experiences for us is excursions.
When I say excursions, think about seeing the pyramids in Giza in Egypt with a bus and a tour guide. That is excursions. We have activities, which is snorkeling in the Red Sea. That's an activity, it's more of a sporty thing. We have also tickets, so tickets into museum, but also tickets into all the major attraction parks in the world, Harry Potter in London and in US, but also Disney World in Paris and in U.S. as well. This is the experience part. We also have Shore Ex. Shore Ex is experiences, but for cruise lines, where we have a brand called Intercruises, and we are the market leader when it comes to cruise lines, excursions as well.
We also do transfers, so point-to-point transfers, airport to hotel or airport to port. We do it with our buses, but we also do private taxis, private transport. Private transport can be a car, a taxi, but it could also be a seaplane in Maldives. We are one of the biggest players when it comes to seaplanes in Maldives. The last part is tours. Tours, we call it multi-day tours, so that's accommodation, transportation, and an experience put together. Used to be old-fashioned group tours. It is now moving into one of the most exciting parts when it comes to dynamic packaging of tours that also Sebastian spoke to before. When it comes to tours and activities, it is a very exciting market because it's growing, still growing.
It is unconsolidated, it's probably Swenglish, non-consolidated, probably English. We have a really good play in that space because we're coming from that space from an operator perspective. We've been investing, thanks to the support with Sebastian and Matthias during COVID, into our platforms, we are now in an excellent position to scale. With the acquisition of the Italian startup of Musement into the platform business, we have now scaled up that business. We have in-house development, so unique own software. In addition to that, we broke our systems open and been doing collaborations with tech startups in U.S. and in Switzerland. With the numbers that you see, I think in 2019, we sold 10 million experiences. We had 31 million transfers. We had 300,000 tours already sold.
We are now a global business, 120 countries, a revenue of EUR 1.2 billion, and our EBITDA in 2019 was EUR 56 million. That makes us one of the leading Tours & Activities players in the world. We were probably the worst hit of the entire tourism sector when it comes to Tours & Activities. We were down 70%. Now we have a really healthy bounce back, so the market, we think, will come back to full in 2024. Our ambition is to be back faster. If you compare with the other sectors in the hospitality business, you can see that flights, 83% today is booked online. Hotels are 74%. From a Tours & Activities perspective, it is only 26%.
That's the point in terms of the non-consolidated market where we now have a play in. It is different compared to the other sectors. The main one is it's a very, very, very fragmented supply, 120,000 something supply base. It's a mix of mom-and-pop shops all the way to these big attractions as Disneyland and everything in between. You still have a large part of the market booking in destination. You have the must-see that you book early, the divings or snorkellings or seeing the pyramids. You also have the boat trips that you prefer to go down to the destination, understand the weather before you book.
We have a play in that with the app, of course, but we also have a play because we are the only one that have a large service and sales force in destination because of our tradition. If you read a lot of customer insights, you can see 2 big trends, and that is that experience is starting to become almost like the entry point for the travel. You envision yourself of what do I really would like to do on the destinations, and then you book the flight and hotels. This is something that is, of course, is going into our view for sure. The other trend is the early digitalization of tours and activities was tickets because it's easy to digitalize.
While the millennials and Gen Zs, they would much rather have a deeper kind of experience, more into the tours and excursion kind of like, which also taps into our strengths. The last thing I would like to highlight is we do tons of research, and we can see a clear correlation between customer satisfaction on the customers that have done an experience. You can also see loyalty. That's just another driver in terms of why we think the tours and activities space is really important. In short, the market is still sizable. Our part is really interesting, growing faster than the rest of the verticals, 4%, 5%. We are at 7%, and we aim to outperform the market. Just a bit of a deep dive into the business model because this is unique for us.
We are an end-to-end platform when it comes to tourism activities. You see on the top pan one, you see the different experiences that I just highlighted. You see the transfers and tours, and these are the product categories that we're using. We have one sourcing platform for all these components, both from a digital perspective, but we also have a global supply team, all around the world, very close to the suppliers, helping them to connect to us. They can connect to us in basically any way they choose to do. We have direct connections, API connections with the biggest players. We have connections to basically every big reservation tech channel manager for in-source activity space. We also have a supplier extranet for the small players that would like to put themselves into us.
We also do input for some of the more traditional venues, most of the museums in Spain and Italy, for example. These are different ways we connect. The next layer is the production layer, and that's where we create our magic. Again, a difference. We have a large portfolio of products that we make. We use supplier components and bring this to our own. I will come to that later. And that's where what we call the production. We use the destination knowledge of the team that we have in combination with the customer insights that we have, and then we put together the best possible portfolio for it. Distribution is probably the area where we have invested the most in the last couple of years.
We used to be a in-destination rep selling channel only. This has completely been transformed now in the last two years. Now we have the three buckets that I explained a little bit more. We have the existing TUI customers that we sell something to. We have B2C, so the open market where customer actually starts with an experience or a transfer or a tours. Then we have something that we've been very successful with, and that is rolling out to other players in the B2B business. We have OTA partners. We have hotel partners. We have airline partners. We have other tour operator partners. They are right now also excited about this because they want three things. They want something that is easy to connect to. We are easy to connect to.
They want products that we also manage by ourselves. We manage this by ourselves. They want to have health and safety checked tours, which we also do because we have the teams and destinations. The last part I just wanted to highlight is also something that distinguish us from the others, is that we have our own operations team, service and delivery locally in the destination that we're doing. That also helps the whole end-to-end product. I just wanted to give you a bit of a feel for how it would look like, and I would like to pick the app as one of the channel that we have, the one that's been growing the fastest for us.
Even though Sebastian is saying that you can buy everything there, I'm of course biased, so I prefer the app to really cater for the experience booking. Let we have a look. Let's run the video.
I want to make my holiday even more memorable for me and my family. Thanks to the TUI app, finding the perfect experience has never been easier. While I'm counting down the days to take off, I can browse all the days out available in my destination. All it takes is a quick tap to save some of the experiences I like the look of, which I can come back to at any time. Now that I've got a shortlist of faves, I get personalized offers and recommendations sent directly to me. It's safe to say I feel inspired to book. After all, it only takes a couple of clicks. Okay, holiday mode activated. In-resort experiences booked. Now, I'm ready to create memories to share with my friends and family.
Haven't traveled with TUI before, and by any chance you would like to try it out, I recommend you to download the app. I even have a special discount for you that Nicola have. If you haven't planned your holiday period yet, you can go there. Just to emphasize that we were before a sun and beach company, I booked my own experience for Christmas. I did a snow scooter safari up in a Swedish mountain, so we literally have products all around the world. I'm personally guaranteeing wherever you are going in this holiday period, we should have a relevant offer for you. The app is good because we now have a play before you go, because you go around and you swipe and you get engaged with the products that we have.
It's definitely valid in destination, because before you had to go and visit somebody to buy it, now you can do it from your sunbed. Of course afterwards, we as a TUI Group will use the TDA to be part of the TUI ecosystem. These are the three things that is really exciting about the TUI app. We now have, of course, one-click pay. You have the Apple Pay, you have the Google Pay and everything. Enough of commercials. Just to highlight in terms of where we are on the market, because of our unique business model, there are no real one competitor. I just wanted to do it by product categories, you have a feel for what the difference is.
When it comes to experiences, there is two clear competitors there, also partners, because we use their platform to sell our own products, and that is Viator and GetYourGuide. Their play is basically to do downstream consolidation, invest heavily into the SEM, acquire customers, and then get the margin out from the suppliers. We, on the other hand, we're an upstream play, so we consolidate the destinations, we have our own products, but in addition to that, we have the same products as they are having to have a relevant offer for all different categories. The differentiation part, the destination-based team, we have the operation delivery and the customer service side. In terms of transfers, we have some transfers in Calixo. We have, as we said, 31 million transfers already today.
We have a play in private transfers today as well with a partnership with Mozio, a U.S. startup. What we are doing here is that we basically have built half of a platform already. We have a sourcing platform that I shared before. We have a fulfillment platform that we launched last year together with another startup called Mobi. They are specialist in fulfillment or routing specialties to optimize routes, and we use them to make a state-of-the-art platform for fulfillment. This is also what you see in the app. If you would do a package booking with us, this is what would power that one. In terms of tours, you have TourRadar and Evaneos, two different kinds of it. TourRadar is an aggregator for group tours.
Evaneos is an intermediator between destination managing companies and us. We now have a play with Nezasa. Nezasa is a Swiss startup. We do our sourcing ourselves, connect to Nezasa for the production, and distribute ourselves. The front end is ours. We launched it as an MVP to the Belgium market, to retail agents and to B2C last week, and we'll use next year to scale it up. This is by far the most complex product. Basically, now we are, as in any digital platform, balancing supply and demand, and that will help us scale up going forward. Just a bit of a guidance on the three different product categories and where we are, from the current revenue share that we have, experience is the biggest.
47% today is the revenue share that we have on the overall TUI Musement. That platform is basically done. We have in the last 2.5 years, completely transformed from offline to completely online and is now scaling that one. The next part we're doing from an experience perspective is to do the same thing for cruise lines. Cruise lines is probably the last part from experience perspective. Still a wholesale model that we're now doing platforming, and we're starting with our own cruise lines, Marella and TUI Cruises, and we think this will be a game changer for the cruise line industry. Great expectations for experiences. In terms of transfers, we have a play already today, mainly for the TUI upsell and also for B2B.
We think it's really important to have also that business as a platform. We are building a distribution platform, the last part. The MVP will be in the beginning of summer. The growth will come from the new customers that Sebastian was presenting in terms of, the accommodation only, the flight only. The other growth part will come from, upgrading from bus transfer to private taxi. Tours I just explained about. We launched it last week. We're scaling it up right now, in terms of adding supply and offer. This is also, a smaller part of our re-revenue share today, but something that we think can have, really big potential going forward. The potential comes from, it is, two different ways of tours.
We have the group tours, but the other part is the individual tours in a completely new interface. If you go into tuitours.com, you will see it, where you basically can see itineraries that we have done based on the best knowledge we have, and then you make them adapt them to your own needs. From a distribution perspective, the three buckets, we have the TUI upsell, we call it. How do you maximize the existing TUI customers that we have? I think we have made this to an art. We are now into every single touch points that you have as a TUI customers. We have retail systems, we have contact center systems, we have rep selling system, we have TDA systems.
The numbers that Sebastian referencing, the uptake that we have 30%-40% is unheard of in the B2B space. That knowledge is something we're now also using to help our partners into B2B to convert even better. The other part I would like to highlight is to B2C open market. We are very strong into sun and beach. We also have 3,000 cities because of our partnership with the different places we have. We now want to do almost the same playbook as we have done with sun and beach. We will use the demand created from the TUI, we will create our demand from direct from B2C to do our own experiences also in cities.
Yes, we have highlighted a list of destinations that we're gonna grow in the next years, and this is really exciting because we go into a new destination space, so new segment cities. We'll also act as one of the entry points for new customers for TUI Group into the TUI ecosystems, for them to be sold, hotels and flights, et cetera. The last part is the B2B. We have booking and Priceline. We have cruise lines, like for example, Carnival. We have other tour operators like easyJet holidays, and we have hotels like Marriott. We have an exciting plan to convert even more B2B partners going forward to increase demand for us to build our own products.
I'm coming from a digital background, I'm really excited about all the platform development, I'm also, as Sebastian was saying, coming from a tour guide perspective. The products are also, I'm also very passionate about. Just two short examples on what we're doing from an upstream consolidation perspective. We have a product line called TUI Collection. This is the best of the best in every single destinations that the teams have found out, put together, in venues that we have special access to with specially trained guides. We have 600 of those in 55 countries, and since 2015, we have sold 5 million of those TUI Collection.
This is something that we're now ramping up because we see that it's even more important to have a really solid offer for our customers. The other part is a new one, just to showcase how we are also working with partnerships and upstreams consolidations. National Geographic reached out to us as we were the global player, and they basically wanted to have a one-day tour product. We've been together with the National Geographic team, setting up 55 different products around the world, high margin, once in a lifetime experiences that we will operate across the world. This is targeted mainly first for cruise lines. We think that channel and that segment works good, but we'll then scale up afterwards. This is just one. The example to left is Jamaica.
Actually been on that one, also highly recommend it. It works with the app as well.
Lucky you.
Yeah, lucky me. The other one I actually was trialing out in Barcelona just two months ago, where they took us around to the museum, the Art Museum of Catalonia, and you go down in the archives and see things other people wouldn't see. It was really, really engaging. We think our customers will really like it. Summary and highlight. This is my last slide. Sorry for being long. TUI Musement has a unique position in the high growth market, developing on the market 7%, and we will outperform that. Profitable player position for growth, combining a digital platform model within destination delivery, the two parts, the end-to-end. We have the three things that other don't do, the experiences, the transfers, and the tours. The cross-selling between we think is so powerful.
We have seen it works in the offline world. We definitely see in the online world as well. As soon as we're platforming the other two, we'll also expose this into every single channel we have. We're using the one catalog, the product portfolio, to sell into those three buckets. That's how we'll grow, continue to invest into our platforms. We will also invest in reach in cities, and then see if we can find M&A opportunities to grow even faster. Our ambition is to outperform growth on the Tours and Activity market, and maintain profitability at the same time. That's it.
Thank you very much. Peter, you may have noticed why we are so excited about that. A lot of new customers, a lot of new products and a lot of cross-selling opportunities with these new customers. When we see what has been achieved in two or three years, it's really amazing. Short summary, we want to accelerate growth, improve profitability and margin, very strong focus on cash. There I'm as finance-orientated as Matthias to strengthen the balance sheet. The midterm ambition is to grow to a significantly in profitability above what you have seen as historically high. Good. Now we are for questions, if you like. Jamie. The microphone. Who has the mic? That's now good. Sorry for that. We need a microphone, please. There, it's coming. It's coming. Thank you.
There was the second on the other side. Jamie and. Yeah. Oops, grab it.
Sup? Thanks. Good morning. Jamie Rollo from Morgan Stanley. Three questions, please. The first is on the rather open-ended guidance, sorry, modeling assumption for a significant increase in EBIT. I think consensus is about EUR 1 billion this year, and you're looking at EUR 1.2 billion by 2025/26. Could you sort of talk about how you feel about expectations this year? As part of that question, I think, Matthias, you talked about Q1 margins being a bit soft. Should we expect profits to be sort of lower in Q1 versus Q1 2019? Secondly, just a sort of residual question on the balance sheet. What are the expectations for the cruise joint venture? Where are we there with KfW, and when might that business be paying a dividend to you?
Just finally, Peter, thanks for the presentation on Musement. There seems to be lots of sort of JVs and partners, so it'd be quite helpful to get a feeling for maybe margins for each of those divisions, roughly, and maybe some form of profit target or some ambition a few years' time to give us a feeling of the magnitude there.
Should I take the first one?
Yes.
Yes, please. Thanks very much for the question. I think indeed, if you look at consensus, that's probably something that we would not feel uncomfortable with in terms of where consensus is. At the same time, it's early in the year and it's something we will need to monitor very carefully over the coming months. In terms of Q1, I think indeed, thanks for this as well. If you think about cruises, for instance, and you mentioned it, Sebastian, the ramp-up will take a bit longer. 2019, for instance, was a record year for cruises. Six ship with Marella, TUI Cruises, fully ramped up. There will be certainly a difference still to 2019.
If I may.
TUI Cruises.
add, maybe I've misunderstood it. The target for 2025, 2026 is not the EUR 1.2 billion. It's well above this number.
Do you wanna talk about TUI Cruises joint venture?
I mean, we have a different situation. With RIU, we can expect that their return to dividend payments earlier. That only means that the cash flow to the TUI AG is higher because they are consolidated, so which has an impact on bank debt. On TUI Cruises, it's different. They have, and I think this is public known, EUR 600 million crisis-related debt. They didn't get money from TUI nor from Royal Caribbean. I think it would not be unreasonable to expect that in 2023 and 2024, they will need the profits they will have to strengthen their balance sheet and to repay the debt.
You're not injecting equity yourself?
Hmm?
Is there an expectation that TUI puts equity?
No, we didn't do, and there is no need to.
No need.
I think the last part was to amusement there. You said joint venture. It's actually not joint venture in terms of the partnerships. We've been creative in the ways we've been doing it. From that perspective, margins won't be impacted. Because we do both distribution and product, so we have both the distribution margin and also the product margin according to the market.
Excellent. Hi, this is Cristian Nedelcu from UBS. Also 3 question from my side, please. The first one, the capital increase, is this the last measure to recapitalize the balance sheet? Can you help us visualize a bit? Can you be a bit more precise on the gross debt ratio do you expect post this event? The second question, you guide for flat net debt in 2023, I read that as a 0 free cash flow, roughly. Can you elaborate on the free cash flow that you think you can generate 2023, 2024, or at least the range of outcomes you would expect there? The last one, could you help us a little bit with the free cash flow burn that you expect to see in December and in the March quarter?
I guess what I'm after here, you have this covenant, the net debt covenant, the 4.5 turns. How do you see at the March testing date? How do you see the net debt to EBITDA there? Is it comfortable below 4.5, or any comments that could help us? Thank you.
Thank you. If I could start with the question on gross debt and further deleverage to the rights issue. I think if you look at our gross debt, with EUR 5.3 plus pensions, EUR 0.4, that's how we normally look at it. If you take a normalized EBITDA where the full year is under normal conditions, you would already be probably below three times. I think prior to the crisis, we already said this can only be a first step, and we were aiming to something which was more closer below 2.5. Yeah. I think that's something without giving a precise number because again, we need to size the capital raise at a later stage.
I think the three times would probably not be what is a good step for all the growth initiatives that we have in front of us. In terms of the free cash flow for this year, I think indeed, we've looked at it in a very conservative way, also with regard to how is the business developing. I think we don't put too much focus in terms of too much stress on the system in terms of our own expectation. Let's see how it develops. I think the last question in terms of what to expect for Q1 and Q2, I would say now if you look at Q4 as a reference, this is pretty much in line with the pattern that we saw in the past.
I think if you apply the same mechanics to Q1 and Q2, this should give you a very good, let's say, structure to where we develop. Of course, the question is how profitable will it be, and in the end, and that's something we don't know yet, is how customer bookings in January, February will actually be.
Sort of, sorry, working capital cash burn used to be around EUR 2 billion?
before December and March quarter? I mean, the Q1 was always you had probably something one and a half as a seasonal swing. You had on top what you had as the seasonal loss in the first quarter. In the second quarter, you normally would get inflow again from working capital, but you would still have some seasonal losses, yes.
Thank you.
Thank you. Good morning. It's Leo Carrington from Citi. If I might ask on the acceleration of online bookings, how does this tie into the retail offer and what does the gradual migration to online also mean a steady structural move to later bookings and potentially then weaker ASPs compared to retail? How do you see that evolving? Secondly, on bookings, for first of all, for the overall business, any change in the competitive environments, promotional activity, deposit levels that you're seeing across the board? Also specifically in amusements, in I think some of your competitors, as startups, any change in the competitive activity there given the macroeconomic environment and the financing environment?
Lastly, you mentioned the inorganic opportunities that might present themselves, once the balance sheet is refinanced. Can you elaborate on sort of more specifically?
Mm-hmm
where you would like to focus that?
Maybe I take the question on retail versus online. At the end, the customer decides. I mean, if you look at Nordics, 90% plus are online bookings. If you go to Southern Sweden, there is no retailer left anymore. If you cross the border to Germany, you have thousands of retailers. They are there because the customer wants to book there. By the way, a lot of Danes also now come to Germany to book in a retail. Out in England, it's 70% online. For us, it's important that we accept what the customer does. Like in a country where Germany, where he books still significantly in retail, then we should support the retail in getting best out of it.
That was not always the strategy we took, but it's from our point of view, management point of view, the right strategy. It's also commercially sound because the margins are significantly higher than online. You could argue, does it depend on the how you book, or is it more the question when customer book? It's probably more the question when they book, and therefore it's again very sensible to work with the retailers and to support them as much as possible. At the end, the customer will decide where he books. The question is online. As I tried to say, the focus should be on booking through the app. Because the distribution costs are zero, and you don't have to spend 14, 15% or whatever on Google or more.
You have the chance to be in contact with the customers by far more often. Promotion. He also had the opportunity to be more in contact with him. Yes, the customer who comes online is fine. At the end, this customer we would prefer to have in our app. Competitive environment, I think we changed. I mean, there are great tour operators out. You have a great tour operator in England. We have the one or other great tour operator in Germany. Maybe the great ones are less than they had been before.
I think it's important that when our marketing head, Erik Friemuth did the presentation, and now he does it regularly once a month, it's important that we don't compare ourselves with tour operator A, B, C, D, E, F, but we compare with on ECO only with Booking.com, who is also an NPS, the benchmark. That we on dynamic package, that's country by country different, we compare with Expedia or others who does it very well. If we look at a flight only, we compare with Momondo or Kayak or Kiwi.com, and not with a specialized, smaller company. That's a mind shift. That doesn't mean that we don't look at the traditional competitors. I said there some are doing well.
I mean, Jet2 had less disruption than we had because they had an own workforce that we can learn a lot from. Transland in Germany is doing a great job. We can learn about the easiness, how they do it. It's all about learning and the learning putting into what we do. On prepayments or the commercial terms, I haven't seen any changes in the markets.
Inorganic opportunities?
You mean M&A activity?
M&A, once the balance sheet is-
I think the focus is, and that's why we said it the last, action we want to take, measure we want to take. I think we decided to do five or six things. We do them right, and then hopefully we are convinced that TUI will be different also when it comes to profitability. If I would say we're looking at, M&A opportunities, it would distract what we do. On the other hand, in two years, there is a interesting thing, amusement and activity. We will look at it, but it's not something which is on our plate today. I think it's very clear we come through extremely difficult situation. We survived. We made a good plan forward.
Our investors who supported us heavily and hopefully will support us with the measures, they expect returns from what we do. That's the focus. Thank you.
Hi. Morning. Richard Stuber from Numis. Just two questions, please. You gave some sort of detail in terms of winter trading. Is there any sort of early color you can give in terms of summer trading, so particularly around what sort of capacity expectations that you may have? The second question, just really sort of clarification on Jamie's question on margins in Musement. I guess the customer mix will change over time as you get more sort of B2B and B2C customers. The product mix may change as well. Do you expect to say margins at that division to be sort of fairly constant, or do you expect there to be, say, any major changes?
On summer, markets are very different. U.K. is very much advanced compared to Germany. The bookings are promising, but we're talking about booking levels 10%-30%. If I would say it looks great, it doesn't mean too much because the booking levels are as they are. Again, it's quite interesting. The pattern is early bookings are stronger, but high season also. I think it would support the expectations going back to normality, but keeping the people book later. On Musement margin, you have seen. I mean, if you compare us with the others where you have public information, they are all, I think, loss-making still.
We wanted to balance our profitability to growth, or put it that way, we want to grow significantly by keeping the profitability, which means that we also have a very strong look on margin. What we need to invest to get more customers, we want to get out from customers which we had. For example, the rate, the buying rate, 40%, if we achieve that, and we come from 20%, which means that we can spend a lot of money on new customers. The other hand, the uniqueness of the model is the new customers. I mean, you could have a model where you buy new customers every year.
What we want is that to make the customer as early profitable because we sell him incremental products of the same or of eco only and so on. It's a very clear. I mean, we could have decided for a. We put all in growth, and therefore it's loss-making. We really try to balance it out because I think we agree to it. It's possible, because otherwise you buy customers, and it looks like you have to buy them new and again and again. It's better to create value with them and to be careful in what customers you buy.
My only additional comment would be is you spoke about a mix of segmentation. That transformation actually already done. Fifty-five-60% is tour, rest is B2C and B2B. We see that going forward in the coming years as well.
Thank you. James Rowland-Clarke from Barclays. Just on the second part of the raise being... You said earlier it might be a similar amount to the WSF payment. Can you confirm what your assumptions are for the consumer environment to meet that kind of, you know, broad guidance on the amount? How might things deteriorate through the winter, or how might that change your outlook on the summer? Secondly, are you expecting your rights issue to be underwritten by your banks? Finally, I guess on your comments about taking market share, you know, gaining new customers, you're coming off a lower NPS score at the moment. Can you talk about how difficult, easy, you know, marketing spend around reacquiring those customers and how that might look going forwards? Thank you.
Yeah. Maybe I take the first two questions on the capital raise. Thank you very much for the question. I think the sizing is, or let me put it differently. We started to work on the opportunity, obviously some months ago because you can see from the details of the agreement that there's a lot of legal technicality included. Since then, I would say the environment that we're in has actually improved. It is to stress this is not to kind of protect against downsides. This is not the rationale for the capital raise. It's to clean up and bring clarity to the situation with WSF and at the same time create a clear pathway to fully exit from the government.
I think this is what's really driving me to make this final step done. The sizing will be next year, I think. It's not in today's environment, I would say this is why we also put out some expectations. I mean, we don't have a precise agenda, but I just said I feel comfortable with consensus, I think this is where we want to be. We also will ask banks to underwrite this is, I think, the indication that we currently have. This will be an underwritten capital raise. On marketing, we are spending a lot of marketing more into the online channels to acquire the customer.
What we want to achieve is to get more customers into the ecosystem and not really buying them, but getting them through other marketing CRM and so campaigns. That's why it's very important that we balance it out. Yes, we will spend significant amount of marketing. In the future, we want. Actually, if you look at our distribution costs, I don't know if you can see them in the deck we provided, it has gone into the right direction due to a higher retention rate we have in the business. I mean, if you look at the best-of-breed competitors, they have retention 70%, 80%. They can spend a lot more when it comes to new customers.
We are now coming above 50% when it comes to retention, which means that we also have more firepower to look into getting new customers. It's now quite obvious that not always acquiring through the web, but through other marketing campaigns to get customers also important. That to balance out is really important. We have no plan to pull in EUR 200 million incremental to get more customers. It's to try to spend more intelligent. Yes, it could be if Musement does as we expect and grow, and we can fuel the growth by adding EUR 10 million more investment, we will do it like we do it on IT if something goes very well. But we always try to counter finance from other sources.
Hi, Kate Xiao from Bernstein. Congratulations on the great progress. Maybe a follow-up on the new customer acquisition there. I think in the presentation you mentioned, in the future, TUI wants to capture two types of new customers that are adventurers or the younger, you know, part of the younger generation, I guess. Anything you could elaborate on, you know, how do you see these segments and the company's aspirations there?
First, thank you for the question. We had a lot of discussion how we want to achieve that in the company. One, we need the right products. If we look at the tour product, it's really outstanding. It's still just limited to the Belgian and Netherlands market, but we will roll it out. What you do see how your dynamic package, flights, hotels, and the whole rest of the tour is then adapted. It's really good. One thing are the products, and second is the communication, how we bring it to existing and to especially new customers.
There, for example, what Peter presented with National Geographic is or with destinations with similar organization, is so important that we use intermediaries who help us to get access to these customer. Second thing is through social media. It's easy and difficult to reach these target group. It's easy because it's doable, and it's difficult because you have to do it in the right way and with the right people, with the right messages. There we are getting more and more advanced through social media to get access to these customer segments. It's exciting because the whole company shifts from. I mean, if you look at how we did traditionally marketing to get new customers to sell, it's very different.
You do, you look at the BI data, which is available from Google, from... to really target the customers. I mean, it's sometimes it's shocking what data is available about me or about you in social media. If you have this data, you can really target the products to these people.
Perfect. Do we have any other questions, maybe from the call?
From the web? Who looks into it?
Yeah. As a reminder, please, if you would like to ask a question or make a contribution on today's call, please press star one on your telephone keypad. To withdraw your question, please press star two. Please ensure your lines are muted locally, you will be advised to ask your question. Please press star one if you want to make a contribution or ask a question.
If there is none. You want to have another?
Yes. Thank you very much. Just one follow-up. Post the capital increase, I think there will still be around EUR 1.4 billion of undrawn RCF from the KfW. Is there any deadline to sort that out by the end of December 2? If you could talk a little bit about your plans to refinance that. Is it via debt or how do you think about refinancing that?
Yeah. What is going to be left with, KfW, I mean, there's one point, I would need now to size the rights issue in order to determine. Yeah, you said 1.4, whatever the number is.
The question is really how much buffer do we want to have over the winter? That's something we are going to see over the coming months. We'll also see how much buffer we need in the current environment. I would expect that we will not need all what we currently have from KfW. Also as in the past, we did not just return lines to KfW to return them, but we always looked, okay, when there's a good opportunity to clean up and do the right things. I would say there's probably three dimensions to that. One is we will do the raise to replace. We will do less facility because we will not need all of KfW.
I think we will probably take another 12 to 18 months to just look at what is going to be refinanced separately, where there's a bonding line, insurance solutions. There will be much more availabilities. We currently have that already, but the raise will of course leverage that.
Thank you.
Thank you. I mean, if there are no questions further on the call, it's been a long morning for all of you. Thanks very much for coming. I don't know, final words maybe for you, Sebastian.
First, thank you for coming. Thank you for the support and for what you do. You hopefully got the impression that how we want to further develop TUI, that how much we do change to good. If we get this refinancing done, we are on a very solid, not path, but fundament basement. What is fundament?
Solid base.
Solid base. We can really put even more effort in developing the business, not always forward-looking. We will always optimize cash and always optimize this and that. The best thing is to do so is to improve the business because then these things come automatically. If there are any question, Nicola and the team is there. You see us energized and on the other hand, we are also looking forward to Christmas. Thank you very much. All the very best.
Indeed.