TUI announced low growth for the summer 2016 season driven by a strong UK market and with Europeans continuing to switch away from Turkey to alternative holiday destinations, according to fvw.
European’s largest tourism group has a 2% rise in bookings across all source markets and a 3% increase in revenues thanks to a 1% improvement in average selling prices. The UK is performing strongly, with revenue up 8% and bookings up 9%, but overall figures for other markets were not disclosed. However, TUI noted in a pre-close trading update that it has sold 47% of its summer programme to date, “broadly in line” with the same time last year.
In terms of destinations, TUI said that demand for Turkish destinations “remains subdued” and overall source market bookings are up 8% when excluding Turkey. The remix of capacity to alternative popular destinations has driven growth in Spanish bookings with medium-haul and long-haul destinations also seeing good demand.
In addition, there are “strong” cruise bookings for summer 2016 driven by demand for Mein Schiff 5 which is due to be launched this July and an improved fleet performance by Hapag-Lloyd Cruises.
TUI’s hotels business has improved occupancy and performance outside Turkey and North Africa driven by the popularity of alternative destinations and new hotel openings. Two new Riu hotels will open in Sri Lanka and the Dominican Republic this summer and there will be further openings in our other hotel brands.
Winter 2015/16 programme closing out as expected
The winter 2015/16 programme is closing out as expected, with the source market programme almost fully sold, according to the company. Revenue is up 3% driven by higher average selling prices across most source markets with a “particularly good” performance in the Canaries, Spain and long-haul destinations. Germany has a 2% rise in winter revenues, with a 3% drop in bookings more than offset by a 5% rise in average selling prices, reflecting the higher proportion of long-haul bookings with growth in particular to Thailand and Asia.
TUI noted that consumer sentiment in Germany continues to be adversely impacted by geopolitical events in Egypt and Turkey and performance has been negatively impacted by the increase of third party flight capacity to sun and beach destinations.
CEO Fritz Joussen commented: “We remain pleased with our Summer 2016 trading performance, with both revenue and bookings ahead of last year. The UK continues to demonstrate a strong bookings performance, up 9% on prior year. Hotels & Resorts are performing well overall, benefitting from increased demand in Spain, the Canaries, and long-haul. Cruise is delivering continued growth, driven by strong demand for Mein Schiff 5 which is due to be launched this July.
“The Group has again demonstrated the flexibility of its business model and the ability to remix destination capacities to match demand and as a result demand and pricing has remained resilient overall despite the impact of geopolitical events.
“Our integrated model with our differentiated range of own accommodation content, combined with strong supplier relationships continue to give us a strong competitive position and sustainable earnings growth. We therefore remain well positioned to deliver underlying EBITA growth of at least 10% in financial year 2015/16.”
Read more here.
RELATED TOPICS: Greece, Greek tourism news, Tourism in Greece, Greek islands, Hotels in Greece, Travel to Greece, Greek destinations , Greek travel market, Greek tourism statistics, Greek tourism report
