File photo: Almost 400 Germans arrive on Monday with Tui in Mallorca

File photo: Almost 400 Germans arrive on Monday with Tui in Mallorca. | MDB Digital

MDB DigitalRachel More & Alexander SmithBerlin16/05/2024 13:00
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Europe's largest tour operator TUI forecast strong summer season demand on Wednesday, despite higher prices, after reporting stronger-than-forecast results in the typically less busy winter period. Shares in TUI, which operates holidays, hotels, cruises and an airline, reversed early losses and were up around 2% at 0811 GMT as TUI confirmed its 2024 forecast of 10% revenue growth and a 25% increase in operating profit. Peel Hunt analyst Ivor Jones said some investors had hoped TUI would upgrade its forecast before the travel-busy summer season which had lifted its shares ahead of the results. Although it sees positive trends continuing in the second half, TUI said it "recognises the current macroeconomic as well as geopolitical uncertainties especially in the Middle East".

The German group, which recently switched its listing from London to Frankfurt, said 60% of the summer programme has been sold so far, in line with 2023's level, while prices had risen by 4% on average. Travel firms are hopeful that 2024's summer season will surpass pre-pandemic levels, despite economic uncertainty, delays in plane deliveries and rising jet fuel prices. TUI's revenue rose by 16% to a record 3.6 billion euros in the quarter, with cruises and hotels segments performing well.

TUI narrowed its operating loss in the January-March period to 189 million euros ($205 million), compared with a consensus forecast of a 246 million euros loss, LSEG data showed. Milder winter weather motivated some travellers to make last-minute bookings in the second quarter, TUI said, adding that demand was strongest for short and medium-haul destinations, with the Canary Islands and Egypt being the most popular and demand for Cape Verde increasing further.

TUI offers staff housing on Canary Islands to appease anti-tourism protests

Demonstrations against mass tourism on Spain's Canary Islands have prompted European travel giant TUI to invest in housing for its staff rather than hotels, the company said on Wednesday, while trying to play down the size of the protests. "We have offered to build housing for employees and others. We have proactively addressed the issue," TUI chief executive Sebastian Ebel said after Europe's largest tour operator reported quarterly earnings.

Last month, thousands of people protested in Tenerife and other islands of the beach-lined archipelago, calling on authorities to limit tourist numbers to relieve pressure on the environment, infrastructure and housing stock.

"This is a very important topic for us to clear up," Ebel said. He argued that package tourism did not contribute to a housing crunch on the islands, saying that every holidaymaker TUI brings to the region has a bed in a hotel. The protests were also less of an issue in the Canary Islands than made out in German media coverage, he added. Nevertheless, the company will not be investing in new hotels there, the CEO said.