Holiday giant TUI has announced a return to profitability, posting its first profit since the Covid crisis and giving a positive outlook; but has said it will take a €25m hit from the Rhodes wildfires through compensation and repatriation payments.
For the third quarter of its financial year, TUI posted underlying profits of €169m; compared to a loss of €27m last year.
It said it is currently seeing “very high demand” for holiday travel and said the outlook for the remainder of this year is positive.
TUI CEO Sebastian Ebel said: “Summer 2023 is going very well and demand for holidays remains high. The Mediterranean remains the most sought-after destination for summer holidays. The heatwave in Northern Europe in June and the wildfires in Southern Europe have only dampened temporarily the previously strong development – but overall it will be a very good travel summer and a good year for TUI in 2023. For the full year we continue to expect a significant year-on-year increase in underlying EBIT. We are investing today to continue to significantly grow profitably in the future. We continue to drive TUI’s transformation and strengthen our competitive position by investing in our profitable growth areas.”
All of TUI’s business sectors – including cruises, TUI Musement (tours and activities), and hotels and resorts – showed strong continued recovery in the latest quarter; while the airlines side of the business showed good improvement.
Regarding Rhodes’ wildfires, TUI said it expects costs to amount to €25m – comprising customer compensation payments, the cost of repatriation flights and the cost of lost business through cancelled flights and holidays. However, Rhodes makes up 5% of TUI’s total summer programme and 80% of its customers who have visited the island this year have gone to the unaffected north of the island. The costs will be reflected in the group’s full-year financial results.