TUI says summer bookings for Turkey slump 40 pct; Greece to benefit

Reuters – TUI Group, the world’s largest tour operator, said bookings to Turkey this summer were down around 40 percent due to security concerns, as it reported a narrower first-quarter loss on Tuesday.

Terror attacks in Egypt, Turkey, Tunisia and Paris over recent months have made tourists more wary of those previously popular destinations, and the Zika outbreak in the Americas is also dampening global travel sentiment.

The caution comes at a crucial time of year for holiday firms, because their customers often book their summer holidays in January, February and March.

London-listed TUI kept a forecast for underlying earnings to rise by at least 10 percent on a constant currency basis, despite the drop in demand for Turkey.

It said that around 14 percent of its customers had travelled to Turkey last summer, with the destination being especially popular with Germans. But after a suicide bomb killed 10 German tourists in Istanbul in January, demand had slumped.

In response, TUI has shifted capacity to Spain and Greece and said its own hotels in Spain, especially the Canary Islands, were benefiting from increased demand for those destinations.

German daily Bild on Sunday cited a survey showing sales at German travel agents were down 13 percent in January. Turkey meanwhile has offered jet fuel subsidies in a bid to stimulate tourism demand after the January attack.

TUI reported a narrower first quarter underlying loss before interest, tax and amortisation (EBITA) of 101.7 million euros ($114 million), against a loss of 104.8 million one year ago. Travel companies typically report a loss in the first quarter.

It also took a 42 million euro hit from a writedown of its stake in shipper Hapag-Lloyd, reflecting a weaker share price for the company.

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