TUI's year closes as expected as customer numbers rise

TUI Group said its financial year was closing as expected with customer numbers increasing despite the heatwave in Northern Europe.

Early trading for future seasons is in line with expectations, the tour operator said in a trading update.

The FTSE 100 company said it benefited from having a balanced range of holidays and destinations that allowed it to benefit from a revival in demand for trips to Turkey and North Africa and increased demand for Greece.

Sales and marketing customer numbers for summer 2018 rose 4% and revenue rose 5% with 98% of holidays sold. Winter customer volumes are 2% up on a year ago and the average selling price is 1% lower.

The company has appeared to fare better than its rival Thomas Cook, which blamed customers staying at home in the heatwave for a profit warning on 24 September. In its trading update TUI did not refer to intense competition and discounting for late bookings as Thomas Cook did.

TUI’s chief executive Friedrich Joussen said: “Having continued to expand our hotel and cruise offer, occupancies and yields remain high, and the number of customers purchasing holidays from us has grown in all major markets, even with the sustained period of hot weather in Northern Europe this summer … Whilst at an early stage, trading for future seasons is overall in line with our expectations.”

Joussen said the unusually hot weather “limited our ability to outperform”. TUI repeated its guidance for underlying earnings to rise by at least 10% in the year to the end of September.