In its half-year results the group reported a narrower operating loss of €125 million for the quarter and confirmed a target for full-year Ebita (underlying earnings before interest, tax and amortisation) to rise by at least 10% at constant currencies.
Meanwhile for the period from October 1, 2017 to March 31, 2018, Tui Group increased its turnover by 7.2% to €6.81 billion.
On a constant currency basis, the group posted growth of 8.5% to €6.89 billion.
The seasonal underlying Ebita loss was improved by 26% to €-158.6 million.
Apart from the foreign exchange translation impact and Easter falling earlier in 2018, the group incurred costs in the wake of the insolvency of the Niki airline and recorded gains on disposal from sales of Riu hotels.
Tui Group chief executive Fritz Joussen said: “We continue to deliver growth, all trends remain intact, and our very good trading performance for summer 2018 fully matches our expectations.
“At growth of 26 per in our operating result and seven per cent in turnover, Tui Group concludes the first half of financial year 2018 with a very strong set of results, and we reiterate our full-year guidance.
“The very good earnings growth is driven by the continued strong demand for our holiday experiences.
“We offer the right products in the market… forecasts for cruising are excellent. German and European holidaymakers are beginning to embrace this way to travel.
“Due to demographic change, traditional target groups are growing. At the same time, sea voyages are becoming increasingly popular among families and younger people. The convergence of these two very promising trends will further accelerate growth over the next five to ten years.
“And we are only at the beginning of this trend.”
Hapag-Lloyd Cruises will shortly launch the planning and negotiation process for a further Hanseatic class ship.
“This market is growing strongly. Thanks to its experience, competence and high quality standards, Hapag-Lloyd Cruises offers great potential to attract new international customer groups and deliver stronger growth in the expedition cruise segment,” added Joussen.
Overall for Tui’s cruising segment underlying Ebita was up 23.2% to €92.4 million.
Tui added: “Due to the continued rise in demand [for cruising], Tui is planning to expand the segment through additional new builds.”
Tui also continues to invest in its hotel companies: Riu, Robinson, Tui Magic Life and the young hotel brand Tui Blue.
The group will continue to expand its portfolio of more than 380 hotels.
Last week two new Tui Blue hotels were opened in Marmaris, Turkey and in Mallorca.
The group’s Spanish hotel brand Riu is also growing, with new hotel projects in Europe, the Caribbean and South East Asia.
In northern region specifically (UK & Ireland, Nordic countries, Canada, Russia), earnings increased “substantially”.
Tui said this was partly attributable to the migration from Thomson to Tui.
“In the UK, demand remained strong,” said Tui in its trading statement. “The rebranding from Thomson to Tui was successfully completed with an additional cost of €20 million in the period under review.
“Earnings by the region also include a benefit of €15 million from the earlier timing of Easter in 2018.”
Underlying Ebita for the region was up 12.7% to €-120.5 million.
