TUI Group shifts its tourist destinations focus to match changing demand after terrorist attacks hit Eastern Mediterranean

Jasper Jolly
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TUI chief executive Fritz Joussen has led the Germany-based company since February (Source: Getty)

Flexibility on destinations has been vital to strategy for the world’s biggest tourism operator TUI Group ahead of its full-year results, as customer demand changes in the wake of terrorist attacks and instability in formerly popular destinations.

Recent terrorist attacks and a deteriorating security situation have dampened demand in the eastern Mediterranean, which includes countries such as Egypt and Turkey, but quick rebalancing towards the western Mediterranean and further afield has enabled the company to refocus.

The company, which owns travel brands around the world including Thomson and First Choice in the UK, has added more hotels in Spain, Portugal and Greece to its portfolio to make up for falling tourist numbers elsewhere.

The company has also pointed to strong demand in more exotic destinations such as Mexico, the Dominican Republic, and Sri Lanka.

Read more: Tui customers still love you Mexico, even if Donald doesn't

The results will come hot on the heels of a deal between TUI and Abu Dhabi’s Etihad Airways to merge their budget airline brands to create a tourism-focused carrier offering 15 million seats a year on a fleet of 60 aircraft. The deal is planned to strengthen TUI’s reach in Southern Europe and North Africa.

TUI Group is set to publish its annual reports on Thursday, with some analysts predicting that the travel group could outperform last year’s profits by as much as five per cent.

Tourism numbers in multiple markets have been hit in the last 12 months by a spate of terror attacks as well as political uncertainty. The UK’s referendum decision to leave the European Union was expected to hit spending as the fall in the value of the pound made travel more expensive, but TUI has so far indicated little downward effect from the vote.

The company lifted its profit guidance for the year in September from 10 to 13 per cent owing to strong performances in the UK and improved trading in its home market of Germany.

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