Tui Travel rises as more Britons book getaways

TOUR operator Tui Travel cheered the market yesterday by revealing a rise in holiday bookings this year.

Tui, which owns Thomson and First Choice, said it expects to reach the top end of its guidance of seven to 10 per cent underlying operating profit growth for the full year.

Bookings over the winter have risen two per cent by value, with a five per cent increase in average sale prices offsetting a four per cent drop in customer numbers, Tui said in a trading update.

While sales drifted lower in France and Germany, other regions including the UK and the Nordics have seen growth.

The firm reported “very strong trading momentum” as summer approaches, with UK and Nordic bookings up nine per cent on last year.

Tui has sold 46 per cent of its mainstream summer holidays so far, on prices five per cent higher than a year ago.

TUI Travel PLC

Online sales made up 40 per cent of UK bookings in the period, up from 39 per cent in 2012.

Chief executive Peter Long said: “We have a clear roadmap for growth built upon a deep understanding of our industry and customers.

“Our strong operational performance over winter means we will deliver reduced winter losses. This very strong trading has continued into summer 2013.”

Shares in FTSE 100 component Tui, which have risen 35 per cent in the past six months, closed up four per cent at 322.8p yesterday.

Analyst Views | Is Tui looking sunny going into the summer?

NICK BATRAM - PEEL HUNT

Attractive products, strong distribution and miserable weather are combining to drive sales across most of the group’s core source markets. The recovery at Thomas Cook may be grabbing all the attention, but Tui continues to deliver a solid performance. We see room to tweak our numbers higher.

SIMON FRENCH - PANMURE GORDON

As expected, Tui Travel has announced a further period of strong trading ahead of its first-half results on 10 May. Winter 2012-13 is ending strongly, with higher average selling prices and margins across key source markets with sales growth ticking up in the UK and Nordics.

WYN ELLIS - NUMIS

The poor weather across much of Europe is clearly providing a helpful tailwind but we believe it is also increasingly apparent that Tui’s strategy of focusing on differentiated and exclusive product is paying dividends. We expect some consensus upgrades.

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