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28 Sep 2017

BY Jennifer Morris

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Tui predicts 10% growth as it prepares for UK rebrand

Tui Group is predicting a 10% growth in profits for the full year, despite the impact of Hurricanes Irma and Maria.

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Thomson will rebrand to Tui in the UK in the coming weeks

In a pre-close trading update ahead of its full year results for the 12 months ending September 30, 2017, the group said that trading for future seasons was in line with its expectations.

 

It said a third of its programme was sold for winter 2017/18 across its source markets.

 

“We expect some hotel closures as a result of the recent hurricanes to allow for repair work to be carried out, but are overall pleased with demand for our clubs and hotels,” Tui said in a statement.

 

“Overall performance is positive, with revenues booked to date up 7% and customer volumes up 3%. There is good growth in bookings for Cape Verde, Cyprus, North Africa and Thailand, although we are seeing some impact on demand for some parts of the Caribbean and Florida as a result of the recent hurricanes.

 

“In the UK, booking and selling price performance are in line with our expectations, given the very strong start in prior year trading (when bookings were up 22%) and impact of currency inflation on selling price.”

 

Tui added that both load factor and percentage of the UK programme sold were in line with the prior year, adding that it was “very pleased” to launch the Tui rebrand in the UK in the coming weeks, “ahead of the key summer 2018 selling period”.

For summer 2018 the UK is more than 10% sold, with revenue up 2% compared with the prior year, with bookings down 3% against the prior year however.

 

Tui said that overall summer 2017 was closing out in line with its expectations and reiterated its guidance of at least 10% growth in underlying Ebita (earnings before interest, taxes, and amortization) for the financial year 2016/17.

 

It said volumes in the UK had remained in line with last year’s performance, despite the impact of the weaker sterling on accommodation costs. In France, the lates market has been very competitive, with an adverse impact on margin.

 

The group added that during the recent hurricanes, which affected its operations in the Caribbean and Florida, its primary focus had been on supporting customers and assisting with rebooking to alternative destinations.

 

It added that trading for future seasons was overall in line with its expectations.

 

Chief executive of Tui Group, Fritz Joussen, said: “As we near the end of the third financial year post merger, our results and trading performance show that we are consistently delivering our growth strategy.

 

“Our hotel and cruise brands continue to perform very well, having further expanded their unique offering this year; and the growth in source market customers demonstrates the strong appeal of our holidays and distribution capability.

 

“At this early stage, overall trading for future seasons remains in line with our expectations. Whilst there are at times external factors which can create uncertainty in specific markets and destinations, we are confident that our balanced portfolio, content led growth strategy and integrated model leave us well positioned to continue to deliver against our plans.

 

“We are therefore pleased to reiterate our guidance of at least 10% growth in underlying Ebita for the financial year 2016/17.”

 

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