Holiday firm Tui has seen quarterly earnings plunge as cautious consumers continue to leave holiday bookings until the last minute amid uncertainty over the Iran war.
Pre-tax profits at Europe’s largest travel operator tumbled 43% to 153.4 million euro (£131 million) in its third quarter to the end of June, with the group hit by rising fuel costs due to the Middle East conflict and pressure to lower prices because of weak demand and increased competition.
Underlying earnings fell 27% in the latest quarter to 233.8 million euro (£199.7 million) as it said customer numbers fell 3% to 9.9 million.
Tui revealed it suffered a hit of 81 million euro (£69.2 million) in the nine months of its financial year so far from the Iran war and hurricanes in Jamaica, including an extra 20 million euro (£17.1 million) “direct” impact from the Middle East conflict on its cruises arm during the third quarter.
In March, the firm was forced to repatriate around 5,000 passengers from two cruise ships anchored in Abu Dhabi, which remained in the Gulf ports until mid-May.
Sebastian Ebel, chief executive of Tui, said the group has weathered the tough trading conditions, but that holidaymakers are increasingly booking trips later towards their departure date.
He said: “2026 is no ordinary year.
“Tui has held its own well in a difficult global environment.
“Our business model is proving to be resilient. Travel remains highly relevant to people’s lives, but the timing of travel decision has shifted.”
Mr Ebel added: “Wars and geopolitical tensions, consumer caution, economic weakness and rising inflation in Europe’s core markets – all these factors have influenced consumer sentiment and the timing of purchasing decisions.”
Tui’s markets and airline business, which includes its traditional tour operator division, swung to a 17.4 million euro (£14.9 million) underlying loss from profits of 49.7 million euro (£42.4 million) a year earlier.
Its holiday experiences arm – which includes its differentiated cruise liners and hotels as well as TUI Musement tours and activities – proved more resilient with underlying earnings slipping 5.6% to 277.8 million euro (£237.3 million).
Tui kept its full-year outlook unchanged as it said bookings were improving.
Booked revenues in the firm’s markets and airline business were 6% lower over the summer season – marginally improved since May – while it has seen a 7% rise in the past four weeks “indicating a recovery in demand”.
Greece and Spain – including the Balearic and Canary Islands – continue to be in high demand, while destinations in the Eastern Mediterranean have also started to pick up again in recent weeks, according to Tui.
