Tui feeling the heat from a baking summer
HOLIDAY GIANT Tui has blamed last year’s “unusually long and hot summer” and the weak pound as first-quarter losses more than doubled.
The group – which last week issued a warning over full-year profits – reported seasonal underlying losses of £73.3m for the three months to December 31 against losses of £32.2m a year earlier.
It said results were impacted by last year’s prolonged hot weather across northern Europe, combined with the Brexithit pound and overcapacity in western Mediterranean destinations, such as the Canary Islands.
The group said summer 2019 bookings were “broadly” in line with a year earlier and holiday prices had held firm, but cautioned its profit margins were taking a hit.
“The market environment for all tour operators remains challenging,” it added.
Last week when Tui warned underlying earnings for the year to September 30 were expected to come in flat at around £1bn.
This compares with previous guidance for at least 10 per cent growth in earnings.
Tui had previously been seen to be weathering the market woes that have already knocked rivals such as Thomas Cook, which is now looking at a possible sale of its airline business.
Fritz Joussen, chief executive of Tui, said: “The overall trends for our sector are intact. Travel and tourism remain a growth market. Customers continue to travel, but they are currently resistant to increases in price.”
Over its first quarter, Tui said turnover rose 4.4 per cent to £3.2bn.
Its markets and airlines arm – which is bearing the brunt of the tough industry conditions – saw losses widen to £155.8m, up from £123.4m. Its holiday experiences division posted an 11.8 per cent fall in earnings to £97m.