TUI: Strong increase in demand for Greece during 2018 - good Q1 figures

TUI reports that current bookings for summer 2018 are “very good and fully match our expectations”, with particularly strong growth for Greece, Turkey and Cyprus, the group said, according to the following article by fvw.com.

Overall, bookings are up by 6% and source market revenue is 8% higher for the forthcoming summer season.

The leading German tour operator presented solid results for the October – December 2017 quarter driven by good bookings, announced its latest cruise ship order and unveiled ‘Destination Services’ as a new growth area.

Europe’s number one tourism group raised turnover (at constant currency) by 9.1% to €3.58 billion in the first quarter of its 2017/18 business year and reduced the seasonal loss (underlying EBITA at constant currency) by nearly 58% to €25.4 million.

TUI’s source markets (now labelled ‘Sales & Marketing’) increased customer numbers by 4.4% as well as turnover by 8.2% to just over €3 billion. The seasonal loss deepened by 3.1% to €133.4 million.

The Central Region (Germany, Austria, Switzerland, Poland) increased customer numbers by over 8% to 1.36 million, including a 6% growth in Germany. But the seasonal loss broadened by 7.6% to €56.4 million.

The Northern Region (UK & Ireland, Nordics, Canada, Russia) also reported slightly higher losses, which included €17 million worth of re-branding costs in the UK, while the Western Region (Belgium, Netherlands, France) reduced its seasonal loss.

Once again, the hotels and cruises business were the principal growth drivers in the Q1 results.

The Hotels & Resorts division almost doubled operating profits to €94.4 million, mostly thanks to a €38 million gain from the sale of three RIU hotels. It also benefitted from an overall increase in average occupancy of the hotels and better rates. Five new own-brand hotels opened during the quarter, including a RIU hotel in Mexico, a Robinson Club each in the Maldives and Thailand and two Blue Diamond hotels in Punta Cana, Dominican Republic. Furthermore, two non-core brand hotels in Tunisia were opened.

The Cruises segment continued its growth path with a 33.5% increase in operating profits to €37.5 million on high double-digit turnover growth, powered by higher average daily rates and higher occupancy for TUI Cruises and British brand Marella Cruises.

TUI announced that due to the continued growth in demand it has ordered another new ship for the Mein Schiff fleet. This seventh ship is programmed for delivery in 2023. TUI Cruises currently operates six vessels under this name.

Furthermore, TUI presented Destination Services as a strategic growth area. This new segment, which organises 24 million transfers along with 4.6 million excursions and tours for more than 12 million customers every year, operates in 115 destinations worldwide with around 1,000 vehicles and 6,500 employees. In Q1, 2017/18, TUI Destination Services handled 3% more guests, generated a 2% increase in excursions and achieved a small operating profit of €1.1 million on turnover of €38.4 million.

“Here, we see great potential to grow through the strength and comprehensive presence of the TUI brand,” noted CEO Fritz Joussen. “We know our customers. Our customers know us, and they trust the TUI brand. This should help us develop more and better service offerings and generate additional turnover.”