finance

Cruise and hotel bookings boost Tui profits for third year


Tui cruise shipImage copyright
TUI

A rise in hotel and cruise bookings has helped European travel group Tui sail through another year with more than 10% growth in profits.

It said next year, profits would grow a similar amount as customers also bought more excursions and holiday activities.

Tui has seen double-digit growth for the last three years.

Last month, smaller UK rival Thomas Cook reported a loss of £163m, blaming warmer summer weather for lower numbers of bookings.

“Our own holiday experiences content accounts for more than 70% of our earnings: hotels, cruises, excursions and destination activities. This enables us to clearly differentiate ourselves from the competition,” said Fritz Joussen, Tui’s chief executive.

Tui Group posted a 10.9% rise in annual earnings, just ahead of analysts’ forecasts. The share price rose 5.5% following the news.

Tui said the “challenging market”, including uncertainty from Brexit and tough competition between airlines, had squeezed consumer spending. Earnings were nearly 15% lower for the group’s tour operator and airline business.

But there was strong growth in demand for cruises, hotels and holiday “experiences”, which together account for 70% of Tui’s earnings. The firm said customers were paying more for extra activities while at their holiday destination, such as jungle trails, city tours and cultural experiences.



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