Holiday firm cashes in on cruise boom

A SURGE in demand for cruises has helped narrow losses at TUI. the FTSE 100 holiday operator said it is rolling out a ship in spring 2023 which will carry almost 3,000 passengers.

turnover within TUI’s cruises business steamed ahead rising 26.6pc to £171.23m in the three months to December 31. Cruise ships and hotels accounted for 56pc of the company’s earnings last year.

AJ Bell investment director russ Mould added: ‘Much of TUI’s future is about investing money into cruise ships and hotels which are considered to be higher quality growth channels for the business.

‘they generate stronger margins and are less seasonal, thereby helping to spread earnings across the year rather than concentrating them on certain months.’

Strong sales in its hotels and resorts business also helped cut TUI’s losses to £64.4m from £91.8m a year earlier.

Overall, revenues climbed 8.1pc to £3.1bn while bookings fell 3pc which the operator blamed on a comparatively strong period last year.

TUI chief executive fritz Joussen said: ‘Our strategy is successful. Our focus is on hotels and cruises. While we used to be a trading company, we have now become developers, investors, and operators.

‘this makes TUI more profitable, and we now generate our earnings more evenly across twelve months.’

high bookings for Greece, turkey and Cyprus have got TUI’s summer business off to a good start, the company said, as well as higher demand for holidays to North Africa.

Joussen explained that the operator’s decision to resume holidays to tunisia was due to returning appetite after an Islamic State attack in 2015

(seepanel).