Tui Group is targeting 10% growth in profits for the full year after seeing turnover climb 8.1% to €3.55 billion for the first quarter and underlying profits improve 58.7% to a seasonal loss of €24.9 million.
For the northern region (UK & Ireland, Nordics, Canada and Russia), turnover grew 6.4% to €1.18 billion but underlying Ebita (earnings before interest, taxation and amortization) was -6.1% to €-31.1 million.
Of the northern region, Tui said the growth in earnings was attributable to "various factors" including a good trading performance, the use of the group’s own centrally launched yield management and CRM systems and the migration from the local brand to the global Tui brand.
"In the UK, demand for Tui holidays remains strong and the rebrand is progressing very well," Tui said in its trading statement.
But brand migration from the local Thomson brand to Tui resulted in costs of €17 million in Q4 of the completed financial year, carried in the reporting period.
Group chief executive Fritz Joussen said: “Q1 2018 has shown that Tui is on track, we continue to grow.
"Following three consecutive years of double-digit earnings growth, we are aiming to deliver similarly strong growth in 2018.
"In the first quarter [October 1 to December 31], companies operating in the tourism sector record an underlying Ebita, reflecting the typical seasonality of the sector.
"This also applies to Tui, which, however, reduced this seasonal underlying Ebita loss by more than half. “Our strategy is successful. Our focus is on hotels and cruises."
Joussen continued: "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.
"In the completed financial year, our hotels, cruise businesses and Destination Services delivered 59% of our underlying earnings. And we continue to invest in digitalisation.
"It helps us enhance our group’s efficiency and offer our customers relevant, tailored products and services.
"Thanks to the use of the blockchain and our own Yield Management system, we manage our bed capacity considerably more efficiently, and our CRM systems allow us to gain a single view of the customer and deliver individualised offers."
Tui aims to increase its turnover and earnings in particular at Tui Destination Services, which looks after Tui customers and pools all services such as transfers, activities and excursions in the holiday destinations.