TUI: No Brexit slowdown
Brexit has had no apparent impact on TUI’s summer 2016 bookings, the travel giant claimed today.
Releasing its third quarter results, TUI said the UK continues to deliver a strong performance, with revenue and bookings up 6%.
"There has been no apparent slowdown in bookings as a result of the EU referendum, demonstrating once again the resilience of demand for our unique and differentiated holidays, distributed directly to the customer," it said.
The UK programme is 89% sold, ahead of last summer, with short haul growth driven by holidays to Spain, Greece, Cyprus and Portugal.
"Long haul bookings are up 16%, driven by growth to Mexico, Dominican Republic and Jamaica as well as new destinations such as Costa Rica," it added.
But TUI admitted trading in some other source markets has been more significantly impacted by geopolitical events.
For the group overall, summer 2016 is 87% sold to date, broadly in line with last year, and revenue is up by 1%.
"We have continued to see a shift in demand to alternative profitable destinations, with source market bookings excluding Turkey up 8%, proving the sustained strength in underlying demand for package holidays and the flexibility of our model in terms of remixing capacity," said the company today.
Sales in the three months to June fell 5.7% to €4.6bn, slightly short of analysts’ forecasts of €4.88bn, but underlying core earnings (EBITA) rose 1.1% percent to €180 million.
TUI said it was still well positioned to deliver at least 10% growth in underlying EBITA in 2015/16, as previously guided.
Connor Campbell, a senior market analyst at www.spreadex.com, said TUI shares jumped nearly 5% today as investors showed their relief that the company is still set to meet its full year profit forecasts.
"TUI has managed to cope with the current climate thanks to customers shifting their holidays to places like Spain or long-haul holidays, both specialties of the company," he said.
"The difference between TUI’s comments that the Brexit hasn’t had much of an impact, and the opposing statements released by some of its sector peers, may be due to the size of the company and its reach across Europe. While a company like Thomas Cook may have felt a post-Brexit pinch, TUI’s European presence may have helped mitigate any slight slowdown in Britain."
Meanwhile, TUI said it was also pleased with early trading for winter 2016/17 and summer 2017.
"Winter 2016/17 is less than 25% booked, with bookings up 8% and average selling prices up 5%. UK bookings are currently up over 20%, with growth driven by increased long haul capacity, including the Caribbean, Mexico, Thailand and Mauritius," said today’s statement.
"Medium haul volumes to Canaries and Cape Verde are also doing well, and the launch of TUI Discovery in June 2016 is driving a good performance by cruise. The UK has also seen a good start to summer 2017 and we are also pleased with the progress in trading for TUI Cruises’ sixth ship, Mein Schiff 6, which launches next year."
Bev
Editor in chief Bev Fearis has been a travel journalist for 25 years. She started her career at Travel Weekly, where she became deputy news editor, before joining Business Traveller as deputy editor and launching the magazine’s website. She has also written travel features, news and expert comment for the Guardian, Observer, Times, Telegraph, Boundless and other consumer titles and was named one of the top 50 UK travel journalists by the Press Gazette.
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