TUI is the full despite the heatwave

TUI fait le plein malgré la canicule

Photo: Lukas Kreibig Agence France-Presse
After nine months, the most important integrated tour operator in the world, posted revenues of $ 11.8 billion, up 6%, and operating income of $ 35 million, compared to $ 6.2 million after nine months in 2017.

TUI Group maintains its targets in spite of the heat wave extended in Europe, the main source of customers of the tour operator. The results after nine months, the contribution of the hotel portfolio is particularly welcome.

TUI Group has recorded an operating profit underlying interest of 193 million euros in the third quarter, which ended on June 30, 2018, a decrease of 18 % year on year. Its revenues have followed the route in reverse, increasing by 5 % to 5.02 billion. After nine months, the most important integrated tour operator in the world, posted revenues of $ 11.8 billion, up 6 %, and operating income of $ 35 million, compared to $ 6.2 million after nine months in 2017.

In its presentation documents, TUI has in particular praised the performance of its hotel portfolio, consisting of 380 hotels. The chain RIU is dominant, but operated under the brand Blue Diamond, property of travel Group Sunwing, stands out. TUI holds a 49% stake in the canadian operator.

Blue Diamond

With strong growth, the hotels operated under the label of Blue Diamond show an increase of their capacity, 16.8 % in the third quarter and 31.5 % in the first nine months, the other components of the portfolio in hindsight. Blue Diamond also provides the revenue per bed, the highest within the hotel group TUI. Its occupancy rate in the third quarter was 83.4 %, for an average rate of 80.4 % in the first nine months. The share of TUI operating income of Blue Diamond has been of 4.3 million euros in the third quarter, up 26 % year on year.

In 2017, on the whole of the year, 24 hotels operated under the Blue Diamond recorded revenue of $ 360 million, or € 543 million $CDN at the current exchange rate, and an operating profit of 61 million ($92 million $CDN), for a margin of 17 %. Their net profit amounted to € 40 million ($60 million CDN), or $ 20 million for TUI.

Targets maintained

The German tour operator said that it is maintaining its target of earnings growth of the underlying operating 10% to 3 % of revenues, for the year 2018. Bookings for the summer of 2018 are up 4 %, with a summer program run at 86 %. The tour operator, however, has had to lower its profit margins in response to the heat wave that hit Europe.

“I’ll be a little bit cautious this year […] We have a good visibility on at least 10 %, but we warn that we will not achieve a performance which is clearly above 10 % “, said Friedrich Joussen. The chief executive of TUI Group added that the heat wave extended into Europe has made an ” outperformance is a little less likely “, with Northern Europeans who have not had to seek the sun and warmth of the south. “The tourism companies don’t usually like when it’s hot, and it is hot. People want to go on holiday when it’s raining “, one can read in the text of the Reuters news agency.

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