Tui, the world’s largest holiday company, has shrugged off the impact of the summer’s record heatwave, which damped demand from northern European holidaymakers at rival Thomas Cook.
The travel group said in a trading update on Thursday that it had increased revenues and the number of customers in the summer season to September 23 and was on track to meet its growth outlook. Thomas Cook, by contrast, issued a profit warning on Monday.
Tui’s revenues for the period climbed 5 per cent year on year, with the number of customers up 4 per cent.
The group benefited from resurgent demand for holidays in Turkey and north Africa and a rise in customers opting for packages in Greece, it said. The company added that it had also been helped by “new openings” in south-east Asia and the Caribbean.
Tui said this meant it was on track to meet its full-year forecasts for growth in underlying earnings before interest, tax, depreciation and amortisation to be “at least” 10 per cent.
In August, the company’s chief executive had said that the unprecedented heatwave, airline disruption due to strikes and the devaluing of the Turkish lira had dented underlying earnings.
The travel group makes most of its profits in the summer when customers in northern Europe seek warmer climates.
Tui’s rival Thomas Cook on Monday cited the heatwave in the northern hemisphere as the reason for a 15 per cent downgrade in its full-year profit outlook.
Frankfurt- and London-listed Tui has expanded its hotel and cruise businesses in recent years in an effort to protect against low-cost flight operators and book-your-own accommodation sites eroding its customer base.
“Having continued to expand our hotel and cruise offer, occupancies and yields remain high, and the number of customers purchasing holidays from us has grown in all major markets, even with the sustained period of hot weather in northern Europe this summer,” Friedrich Joussen, Tui’s chief executive, said.
Russ Mould, investment director at AJ Bell, said Thursday’s announcement from Tui “raises questions about whether Thomas Cook, which warned on profit earlier this week, struggled with bookings simply because potential holidaymakers were sunning themselves at home or if there are more fundamental problems facing the business”.
He added: “The nature of Tui’s tour operating business, which is less exposed to the late-booking market where Thomas Cook suffered, and its greater exposure to the high-growth and high-margin cruise ship business have helped the former perform better.”
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