Political unrest costs Tui £29 million

Political unrest costs Tui £29 million

Tui Travel has followed rival Thomas Cook in disclosing the level of losses caused by the political unrest in the Middle East and North Africa.

Tui said the figure amounted to £29 million – a figure higher than Cook’s £22 million.

The later timing of Easter this year also hit the company to the tune of £17 million.

Despite this, the group’s winter half year winter operating loss improved by £15 million to £307 million based on revenue of up by 5% to £5.205 billion.

The UK and Ireland businesses delivered a deeper operating loss of £173 million against £161 million the previous winter period. The result was affected by two cruise ships being in extended dry dock in the first quarter. 

But Tui admitted that UK booking volumes for this summer have slowed, with total bookings to date flat against the same time last year.

Differentiated holidays are showing a 16% improvement as they outperform other types.

There has been a continued shift towards all inclusive breaks, which now represent 46% of bookings, up from 43% this year as consumers look to better budget their holiday costs.

Tui also revealed that the difficult economy had led to holidaymakers reducing their holiday durations with bookings for seven and 10/11-night durations rising by 6% and 24% respectively against a 7% decline in 14-night packages.

Chief executive Peter Long said: “At this stage of the booking cycle we remain cautious given the uncertain economic and geopolitical outlook.”

The group said it was able to react quickly to the situation in Egypt and Tunisia by re-shaping its summer programmes, “mitigating the potential impact” and meet demand for alternative destinations such as Spain, Greece and Turkey.

Long said: “I am pleased to report an improved first half operating result, particularly given the significant headwinds from political events in Egypt and Tunisia, the weak UK economic environment and the shift of the Easter peak period from Q2 to Q3 this year.

“The result demonstrates our continued success in turning around underperforming businesses and shows the strength of our differentiated products which have allowed us to outperform the market.”


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