by Bradley Gerrard, The Telegraph, May 9, 2018
The world’s largest holiday company Tui’s big bet on cruises is paying off as steep demand helped to pare losses at the tour operator.
Chief executive Fritz Joussen has overseen a multibillion-euro investment splashed out on its growing fleet of ships, which was enlarged in May last year with the arrival of Mein Schiff 6.
The holiday company boss said his company had acquired another cruise ship in April which will be operated under its Marella Cruises brand this year and that a third new cruise ship would be launched under the Hapag-Lloyd Cruises brand in 2021. A further two ships, set for launch in 2019 and 2023, are also planned.
In the traditionally quieter six months to end-March, earnings in Tui's cruises division leapt almost a quarter to €92.4m (£80.9m) which, alongside a 35pc spike in profits in its holiday experiences division to €262m, meant pre-tax losses fell to €247m, from €311m during the same period the previous year.
“Forecasts for cruising are excellent,” Mr Joussen said.
“German and European holidaymakers are beginning to embrace this way to travel. Due to demographic change, traditional target groups are growing. At the same time, sea voyages are becoming increasingly popular among families and younger people.”
He added that, due to this demographic shift, he expected to see demand rising in the next decade.
“We are only at the beginning of this trend,” he said.
Mr Joussen also said the company would become the “world’s leading provider of destination experiences” thanks to its upcoming acquisition of an excursions business from Hotelbeds, which will complete in the coming months.
The company said the recently “more subdued demand” for holidays in Turkey and North Africa was rebounding and helped group revenues rise 8.5pc to €6.8bn.
Demand from UK holidaymakers remained strong, helping Tui curb losses by 12pc to €120m in its northern region division. But low demand in countries such as Germany and Holland meant losses widened in its central and western divisions.
Sales of its summer holiday schedule are in line with the previous year, with 59pc of its breaks sold. Mr Joussen said Spain remained the top destination after two years in pole position but that there was visible growth in Turkey, North Africa, Greece, Bulgaria and Croatia.
Elsewhere, Mr Joussen said he would continue to build on the number of own-brand hotels the group has from its more than 380 now. He said its Tui Blue brand just opened new sites in Turkey and Mallorca while its Spanish hotel brand Riu was opening sites in Europe, the Caribbean and South East Asia.
Shares in the company initially fell 3pc on the results but recovered some ground to be down just over 1pc at £17.31.
This article was written by Bradley Gerrard from The Telegraph and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to [email protected].
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