TUI sees resilience from UK holidaymakers

TRAVEL GIANT TUI has said there is “resilient” demand for its holidays from UK customers, despite having hiked winter travel prices 8 per cent to make up for the weak pound.

UK bookings over winter 2017/2018 were down 3 per cent when accounting for its cruise business, but the company said that was due to very strong comparative figures a year earlier when bookings jumped 12 per cent.

Regional demand was also cheered in light of the 8 per cent rise in average selling prices for the winter period, which TUI said reflected the “ongoing impact of the weaker pound sterling” and resulted in “more normalised trading margins”.

The company said overall bookings for summer 2018 have started well, with the UK “broadly in line” with the prior year – down 1 per cent – and average selling prices up 3 per cent.

The FTSE 100-listed firm logged an 8.1 per cent rise in revenues to £3.1bn, up from just shy of £2.9bn a year earlier.

When stripped of currency effects, turnover climbed 9.1 per cent.

Pre-tax losses, meanwhile, narrowed from £91.8m to £64.4m for the period.

Chief executive Fritz Joussen said TUI was still on track to see underlying operating earnings rise at least 10 per cent for the full year, as its hotels and cruise operations continue to grow.

“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 12 months,” he said.

As a whole, underlying earnings for its holidays and resorts business nearly doubled, rising 91.9 per cent to £83.9m in the first quarter to December 31.