Summer holidays in the Mediterranean are falling, as the British choose to enjoy sunny weather at home, with Tui suffering a 12.7% drop in profits
- Tui's boss says it is likely that the British heat wave has triggered a fall in travel
- It came when the company revealed a 12.7 percent drop in profits to £ 174 million
- The company also suffered a blow of £ 11.7m for the interruption of flights
James Burton, Money Mail Reporter for the Daily Mail
Families stay at home to enjoy the warm weather instead of booking a summer holiday on the continent, travel firm Tui said.
Chief Friedrich Joussen said it is likely that the heat wave has triggered a decline in travel to Spain and other Mediterranean countries as customers enjoy the British sun.
But he added that Turkey and the nations of North Africa, like Tunisia, are once again gaining popularity after a few years of slowness after terrorist attacks and attempts at a political coup.
Families stay at home to enjoy the warm weather instead of booking a summer vacation on the continent, said Tui travel company
It is likely that this has been helped by the fall of the Turkish lira to record lows, with a 51% increase in the pound in the last year.
Analysts cautioned that this monetary turmoil would also affect Tui, formerly known as Thomson, with changes in the exchange rate that will likely cost the company £ 31 million this year. It came when the company revealed a 12.7 percent drop in profits to £ 174 million during the three months until June 30.
Joussen said that the summer reserves have probably been affected by the heat. He said: & # 39; I am a man a little cautious, and I know from the story that if the weather is so warm, people say: & # 39; Maybe I'll save the money for the next winter vacation. "
The company also suffered a blow of 11.7 million pounds for the interruption of flights, mainly caused by air traffic control attacks in France. But it also enjoyed solid growth in its 380 hotels and a fleet of 16 cruisers.
Tui suffered an impact of 11.7 million pounds for the interruption of flights, mainly caused by air traffic control attacks in France
The firm is spending a lot on new resorts in the Caribbean and Southeast Asia in an attempt to catch more tourists from the US. UU And China.
Joussen said the two regions are likely to represent £ 8 for every £ 10 of hotel investment as Tui prepares for more demand.
More and more Americans have passports and millions of them are three hours away from the Caribbean islands, he said.
In China, the increasingly wealthy middle classes of the country offer an even greater opportunity.
More than half of the visitors to the Tui resorts in the Maldives and similar areas are Asian, and most of them are Chinese.
Joussen said: "At a certain moment, China will be for Southeast Asia what the United States is for the Caribbean." We see that the vision is already happening today. "
Investors were worried about falling profits and sold shares of Tui yesterday, sending shares down 2.5 percent, or 40p, to 1542p and erasing more than £ 200 million of business value.
Russ Mold, an analyst at investment firm AJ Bell, said: "The holiday package, part of the business, particularly the UK component, has underperformed, almost certainly due to the World Cup and the recent heat wave" .