Growth in long haul and cruise bookings from the UK have helped drive a strong performance for Tui for this summer.
UK customer numbers are up by 3% with an 11% increase in revenue. The summer programme from the UK is 53% sold – a higher proportion than other regions in Europe.
Tui Group’s overall summer programme is 48% sold, in line with the same time last year.
“Similar to winter, lower demand for North Africa and Turkey is offset by higher demand for other destinations such as the western Mediterranean and Caribbean,” the company said in a trading update this morning.
“Trading reflects growth in demand for destinations such as Greece, the Canaries and long haul, with a further shift away from Turkey,”
Tui capacity to Turkey has previously been “significantly” reduced. “Excluding Turkey, bookings are up 7% overall, with Germany up 8% and Nordics up 9%.
“UK revenue and selling price performance reflects continued growth in long haul and cruise – with the launch of Tui Discovery 2 in May – as well as the impact of currency inflation for euro-based destinations,” the Thomson and First Choice owner said.
Looking forward, Tui said: “Our balanced portfolio of markets and destinations, our focus on growth in own hotel and cruise brands and our strong balance sheet put us in a robust position, despite the impact of macroeconomic and geopolitical challenges in certain source markets and destinations.”
Europe’s largest travel group expects to achieve a 10% increase in annual earnings for the 2016-17 financial year, as previously indicated.
The winter 2016-17 programme is 97% sold with improved revenue performance from the UK due to growth in long haul and cruise plus higher demand for the Canary Islands, mainland Spain and Cape Verde – offset by lower demand for Turkey and Egypt, particularly from the Nordics region.
The proportion of winter bookings via direct and online channels was up one percentage point to 73% and up two percentage points 46% respectively.
Tui Group chief executive Friedrich Joussen said: “Winter 2016-17 is closing out as expected, with a good performance by hotels and resorts, ruise and growth in source market revenues, increasingly booked via our direct and online channels.
“Overall, Summer 2017 remains in line with our expectations, with almost half of the source markets’ programme sold, further openings scheduled in our group hotel brands, and cruise ship launches in both Tui Cruises and the UK.”
He added: “We are progressing our transformation as the world’s leading integrated tourism business focussed on own hotel and cruise brands, financed by our strong cash flows and proceeds from the disposals of Hotelbeds Group and Travelopia, creating a more competitive and less seasonal business for the long term.
“Whilst the impact of macroeconomic and geopolitical challenges is evident in certain source markets and destinations, our balanced portfolio of markets and destinations, our focus on growth in own hotel and cruise brands and our strong balance sheet put us in a robust position.
“We therefore reiterate our guidance of at least 10% growth in Group underlying EBITA in 2016/17.” The company is to issue results for the six months to March 31 on May 15.
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