TUI Travel Releases Preliminary Results

British tour operator TUI Travel PLC said today it will deliver full-year “underlying operating profit growth of at least 9 percent” driven by higher average selling prices over the summer season (2014), without providing any hard numbers.

Releasing what it calls preliminary results for its fiscal year ended Sept. 30, with final results due to be released Dec. 4, the company said its UK and German markets were on target to deliver record profits, and that bookings are up for the 2014-2015 winter season in addition to a strong start in the UK for the 2015 summer.

TUI Travel, which is also in the process of merging with its majority owner TUI AG to create what it calls the world’s biggest leisure and tourism group, said its winter 2014/15 overall bookings were up 2 percent and UK bookings for summer 2015 were already 11 percent higher.

For the coming winter, TUI said bookings are up 5 percent in the UK and average selling prices are up 2 percent. Its so-called “unique holidays” dominate with 84 percent of all bookings. With the expansion of the company’s airlift, it is seeing more demand for Mexico and Jamaica. To date, it said, 34 percent of its winter program has been sold.

In the Nordic countries, TUI has reduced its capacity due to a more challenging business environment, hence bookings are down 5 percent, but prices are up 2 percent over the same period last year. To date, approximately 52 percent of its winter programs have been sold.

In Germany, bookings are up 4 percent against a 3 percent drop in average selling prices. To date, 37 percent of the winter programs offered there have been booked.

TUI also cited the ongoing challenging environment for tour operators in the Russian and the Ukrainian source markets, partially due to the devaluation of the rouble, and plans to cut back its offerings in these markets by approximately 30 percent.

In a prepared statement, Peter Long, CEO, said that its trading and market performance continues to be driven by increased customer demand for TUI’s unique holidays and higher conversion rates from web platforms, due to the company’s digital transformation strategy.

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