Hotels, resorts and cruises come to TUI & # 39; s rescue while holiday giant warns that the tour operator is under great pressure
Adrian Lowery for Thisismoney.co.uk
Holiday giant Tui warned that the enterprise is under great pressure today for tour operating, despite encouraging revenues from hotels, resorts and cruises.
Total travel revenues increased by 11 percent to £ 1.1bn, but the group warned that this masked a poor performance in the core activities of tour operators and airlines, where revenues dropped 14.6 percent to £ 305 million.
The group blamed the collapse of the long-term hot weather in the UK and Europe, along with the impact of the air traffic control strike and the Brexit hit pound
Shareholders arriving at an annual general meeting of the world's largest tourism group TUI in Hanover, central Germany.
However, investors welcome the positive headline figure and bought it by sending the shares 60p or 5 percent higher to 1199p.
Tui admitted that it was a challenging one. year was for the tour operator and the airlines division and said that this will continue until 2019. Winter bookings for 2018-19 are 1 percent lower, while prices have fallen by 2 percent.
It said: "The weakness of the British pound due to the Brexit vote, long-term disruption of air traffic caused by French air traffic control strikes and a prolonged heat wave in Northern and Central Europe had an impact on the whole sector and reflected also in the operating result of the markets and airlines, which did not meet the levels of the previous year. & # 39;
Rivals have also been hit by the heat wave and strike actions, with Thomas Cook distributing a series of recent profit warnings as the warm weather took its toll.
But Tui said it expects the profit to grow again by at least 10 percent in 2019, because the rest of the company would have to compensate for the heavy trade in the tour operator and the poor of airlines.
In the year to September it increased from 38.7 percent of the underlying result to 494.5 million euros (£ 445.4 million) in the hotels and resorts, while the cruise structure yielded a 26.8 percent increase to 324 million euros (£ 291.8 million). ).
About Brexit Tui repeated that it remains concerned about flight rights in the event that the UK leaves the EU without a deal.
It is in discussion with ministers and regulators in the hope of a "special agreement & # 39; to close and has started contingency plans for a hard Brexit.
The group said that this is also the formulation of "scenarios & mitigation strategies for different outcomes"; includes.