Tui's share price rises as travel firm shrugs off terror impact to be upbeat about year's prospects

 
Catherine Neilan
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Tui's share price climbed this morning as it shrugged off issues plaguing other travel firms, with solid current trading and a full year earnings forecast of at least 10 per cent.

The figures

Revenues for the year to 20 March are up three per cent, although total customer numbers are flat. In the UK bookings are up two per cent while average selling prices are up one per cent.

So far 93 per cent of the winter programme has been sold, one percentage point ahead of last year, with a 12 per cent rise in long haul bookings. Demand was particularly high for Mexico, Dominican Republic and Jamiaca.

However short haul bookings also rose, up one per cent on last year, with the Canaries, Spanish mainland and Cape Verde all performing well. However bookings to Turkey, which has seen a spate of terrorist attacks lately, has been "subdued".

For the summer, the group has sold 47 per cent of programmes, which is broadly in line with last year. Revenue is up three per cent, with both customer bookings and average selling price on the rise. UK revenues are up eight per cent.

Why it's interesting

Those figures are in keeping with research published last week that showed British holiday-makers were opting for "safe" destinations in the wake of recent terror attacks - which is causing an unintended price differential.

The group had a buoyant outlook for the rest of the year, saying customers were travelling to "traditional destinations such as Spain and the Canaries, and increasingly to long-haul locations, benefitting our strong hotels & resorts brands in those parts of the world".

"This demonstrates once again the resilience of our business and our strong competitive position," it added.

Shareholders appeared to agree: Tui's share price was up 2.5 per cent on the open.

What Tui said

Chief Executive Friedrich Joussen said: "The group has again demonstrated the flexibility of its business model and the ability to remix destination capacities to match demand and as a result demand and pricing has remained resilient overall despite the impact of geopolitical events.

"Our integrated model with our differentiated range of own accommodation content, combined with strong supplier relationships continue to give us a strong competitive position and sustainable earnings growth. We therefore remain well positioned to deliver underlying EBITA growth of at least 10 per cent in financial year 2015/16."

In short

Customers are changing where they are booking their holidays - but they are still booking.

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