Bulgaria and Croatia see more bargain-seeking Brits
Driven by the slump in sterling, UK holidaymakers are shifting destinations
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Your support makes all the difference.British holidaymakers are moving east to extract more value for their pounds, according to Europe’s biggest travel firm.
TUI Group reported an operating result, before accounting for interest and tax, up 12 per cent to €1.121bn (£989m). Turnover rose at a similar rate to €18.5bn in the year that ended 30 September 2017.
Chief executive Fritz Joussen told The Independent that the average spend of British holidaymakers on a summer holiday is stable at around £1,000 per person, but UK travellers are moving to cheaper locations: “If a vacation to some of the destinations is too expensive because costs have increased, the destination will change. We have started huge developments and movements into Croatia and Bulgaria.”
Last month its nearest rival, Thomas Cook, reported prices for hotels in Spain had risen sharply, exacerbated by the devaluation of sterling after the EU referendum.
Cruise prices have risen, with British passengers paying an extra £10 a night year-on-year. On Marella, the rebranded Thomson Cruises, the average rate per passenger per day is now £131.
The TUI Group as a whole said that it had enjoyed “another very good year”, as investments in high-margin hotels and ships pay off.
“For the third consecutive year, we have delivered double-digit growth in our operating result,” said Mr Joussen.
“With our strong cash generation, we have the freedom to invest in growth,” he said.
Over the past five years, the company has moved from a traditional tour operator business model, with an airline and retail stores, to “an operator of hotel and cruise businesses”.
“Tour operators generate profits only in the summer quarter,” said Mr Joussen.
While TUI still has a large airline and many travel shops, hotels and cruises now deliver 56 per cent of its profits, and the business is becoming less seasonal.
Turkey is rebounding sharply, with bookings for TUI’s own hotels for summer 2018 up 70 per cent. The chief executive predicted: “In a couple of years, high-quality hotel stock will be scarce.”
While North Africa as a whole is seeing growth, Mr Joussen would not say when British customers might return to Tunisia. After the massacre of 30 TUI holidaymakers at a hotel in Sousse in 2015, the Foreign Office put Tunisia on the no-go list. That advice was lifted in the summer, and Thomas Cook is re-launching holidays from the UK to Tunisia in February 2018.
Mr Joussen said any move back to Tunisia would be left to TUI’s UK management. “That is a local decision,” he said.
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