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Berlin / AFP
German-British travel giant TUI said on Thursday it is weathering the hard times brought on by a series of terrorist attacks despite a slide in revenues in its third quarter.
“People still want to travel, but they’re travelling differently,” chief executive Fritz Joussen said in a telephone conference.
“The overall number of travellers will be higher than last year,” he predicted.
Only one year of the last 15 has seen a drop in tourist numbers, Joussen pointed out — 2009, in the throes of a global economic downturn.
Revenue in the third quarter of the group’s financial year was down 5.7 percent compared with the same
period in 2015, at $5.1 billion.
Falling reservations for north Africa and Turkey, the effects of terrorist attacks like the Brussels airport bombings in March, and Easter falling outside the second quarter this year were to blame for the slide, the group said in a statement.
But Joussen said that he expects the terrorism effect to wear off as prospective customers adjust to the new reality.
“The more incidents you have, the more customers accept that the world is uncertain and that you can’t do much about it,” he said.
TUI said it would be able to meet its forecast of growing operating profit for the year as a whole by “at least 10 percent” compared with the 2014-15 financial year.
The group “currently notes robust bookings and new reservations are meeting our expectations,” the firm said in its statement.
Although bookings suffered, TUI was able to increase operating profits as measured by EBITA by 24 percent, to 150 million euros.
The breadth of TUI’s activity — across more than 100 different countries — means that it is often able to redirect customers rather than losing them altogether if they lose their appetite for a particular destination.
While some countries like Turkey, Egypt and Tunisia have suffered, others in the western Mediterranean have gained popularity, especially Spain, Joussen said.
TUI is also betting on growing income from hotels and cruises to make up some of the ground lost to fears of terrorism.
Meanwhile, there is little sign so far that Britain’s June 23 vote to leave the EU — which set the British pound sterling tumbling in value — has put Brits off travel abroad.
Summer 2017 — which Joussen describes as “a long way to go” — is when the effects of the currency drop will really make themselves felt, the CEO predicted.
But he added that the popularity of the group’s all-inclusive offers on the British market should insulate it slightly from British consumers’ lost spending power.
“People book more if they are sure about the spending,” he said.