Q3 financial results

TUI has strong summer sales in Germany

Strong sales growth in Germany, the Nordics, hotels and cruises along with better demand for Turkey and North Africa were the key points of TUI’s Q3 results that were released today.

August 10, 2017
Fritz Joussen has transformed TUI into a pure tourism group
Photo: Rüdiger Nehmzow

For summer 2017, TUI has an 8% increase in revenue, including a 4% rise in bookings, across all source markets. “Lower cumulative bookings for some destinations including Turkey are offset by strong demand for Greece, Spain, the Cape Verde Islands, Croatia, Italy, Bulgaria and long-haul destinations including the Caribbean,” the group said.

Moreover, there is an “encouraging improvement in demand for North Africa and Turkey” due to late bookings, TUI pointed out.

Among the major source markets, Germany revenues are up by 7%, with a 4% rise in bookings and 3% increase in average selling prices. The Nordics are also performing well, with a 13% rise in revenues. The UK has flat bookings but a strong 7% average price rise, resulting in 7% revenue growth.

In the April – June quarter, Europe’s largest tourism group increased turnover by 12.6% to €4.78 billion, which was a 16.4% underlying rise. Underlying EBITA climbed 18.7% to €191 million, while reported EBITA, including currency effects and the timing impact of Easter, rose by 37.7% to €221.6 million.

In Germany, customer volumes increased by 11% in the third quarter, reflecting the later timing of Easter and the later timing of the Whitsun holiday which increased volume and margin. TUI Germany also saw an improvement in its trading performance.

In the UK, summer bookings remained flat at the high level recorded in the previous year despite the price inflation caused by the weakness of sterling. Due to the later timing of Easter into Q3, customer numbers in the UK were 5% up year-on-year.

The Nordics delivered a strong performance in the third quarter, benefiting from the TUI rebranding and an improved trading performance from the new Yield Management System. The successful change in the product mix, reflecting an expansion of the offering to Greece and the Canaries to offset subdued demand to Turkey, had a positive impact.

The Hotels & Resorts delivered significant growth with a 15.8% rise in underlying EBITA to €66 million as expansion of the portfolio continued. Following the opening of TUI Blue Selection in Tuscany in April and TUI Blue Jadran in Croatia in July, five further new hotels of the core brands of TUI Hotels & Resorts will open in the forthcoming winter season, including two Robinson Clubs, one in the Maldives and one in Thailand, one RIU hotel in Mexico and two Blue Diamond hotels in the Dominican Republic. Moreover, existing hotels will be repositioned as TUI Blue hotels.

The Cruises segment (TUI Cruises, Thomson Cruises and Hapag-Lloyd Cruises) improved profits very strongly with a 54.2% rise in underlying EBITA to €69.4 million, based on a mix of high occupancy and higher prices. The three cruise fleets also continued to grow.

CEO Fritz Joussen declared: “We successfully completed the sale of our Travelopia specialist tour operator business in Q3 and the remaining stake in Hapag-Lloyd AG in July 2017. This completes the transformation of the former diversified conglomerate to tourism group TUI.

“The rebranding has also been very successful in all countries and has strengthened TUI both at the global and local levels. The UK will be the last market to roll out the rebranding in autumn 2017. We will then consistently operate under the TUI brand in all Source Markets,” he added.

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