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Travel industry news

13 Dec 2018

BY Jennifer Morris


Tui Group full-year earnings up 11%; similar growth forecast for 2019

Tui Group has reported a full-year underlying profit growth of 10.9% and expects similarly strong growth for 2019 despite “a challenging market environment”.

Tui headquarters

Future growth will come from further investments in hotels and cruise ships and digitalisation, Tui said

For the financial year October 1, 2017, to September 30, 2018, Tui Group’s underlying ebita (earnings before interest, taxes, depreciation, and amortization) increased by 4.1% to €1.147 billion including foreign exchange translation and by 10.9% to €1.222 billion on a constant currency basis.


Turnover growth was 5.3% to 19.5 billion including foreign exchange translation effects and 6.3% to €19.7 billion on a constant currency basis.


The board is proposing a dividend of €0.72 per share.


Tui said again that its “transformation from traditional tour operator to tourism business” had “again paid off”.


For the financial year 2019, the Tui executive board expects to deliver growth in underlying earnings of at least 10% “in a challenging market environment”.


Group chief executive Fritz Joussen said: “We are investing, we are growing with Tui’s high-margin products and services and our businesses are increasingly scaling.


“Today, our own holiday experiences content account for more than 70% of our earnings: hotels, cruises, excursions and destination activities.


“This enables us to clearly differentiate ourselves from the competition.


“With more than 20 million customers, use of state-of-the-art IT and intelligent customer systems, we have considerable potential for new business, turnover and earnings.


“We will continue our successful transformation: The next step will transform Tui into a digital and platform organisation.”


Tui added that owing to its “strategic transformation from a traditional tour operator and trader to a developer, investor and operator of hotel and cruise companies” business delivered “considerably higher margins and is less seasonal”, reducing its dependence on the summer months.


Future growth will be created through further investments in hotels and cruise ships, Tui said, but also through digitalisation.


Tui has also invested in the expansion of its Destination Experiences segment, which provides services and activities in the destinations.


Elsewhere, Tui has started to use blockchain technology to manage its own hotel capacity “so as to achieve optimum occupancy and improve profitability through its own yield management system”.


“Modern IT, artificial intelligence and algorithms shall help to further increase the Group’s operating result in future,” it added.


In terms of outlook, Tui said current winter trading nearly matched the prior year’s level.


Booking rates for the group’s hotels in Turkey and North Africa were “considerably picking up again”, the operator added, and its hotels in Spain “continue to report high booking levels”.


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