Turkey’s status as one of the most popular destinations for all-inclusive holidays for sun-seeking Britons, Germans and Scandinavians is eroding rapidly amid mounting security fears.
TUI Group, Europe’s biggest tour operator and owner of the Thomson and First Choice brands, said that with demand for Turkish destinations “remaining subdued”, it was increasingly shifting capacity to mainland Spain, the Balearics and the Canaries.
The Anglo-German travel group said that it was also seeing continuing growth in demand for Bulgaria and long-haul destinations including Mexico, the Dominican Republic and Jamaica, as well as Costa Rica, which it added to its summer programme this year.
The group said in February that bookings to Turkey, which accounted for 14 per cent of its passengers last summer, had fallen by 40 per cent because of security fears caused by the war in neighbouring Syria and the resultant migrant crisis. There have also been a series of terrorist attacks in Ankara and Istanbul.
Despite the impact of such geopolitical events — Egypt and Tunisia have also been hit — TUI said that its ability to “remix destination capacities to match demand” had enabled it to circumnavigate the turbulence and deliver strong bookings.
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As an example of the flexibility of its business model, it is understood that after the Russian aircraft was brought down over Sinai last October after taking off from the Egyptian resort of Sharm el-Sheikh, TUI management met that same night to analyse the impact and immediately bought extra capacity in the Canaries at a cost of €26 million.
It said that after closing the winter programme 95 per cent sold, in line with last year, and revenues up 3 per cent, its summer programme was 47 per cent sold, again “broadly in line with prior year”. Summer revenues were up 3 per cent on selling prices up 1 per cent.
Although overall bookings are up 2 per cent, excluding Turkey the increase is closer to 8 per cent. The company said the recent Brussels terrorist attacks had affected bookings to the Belgian capital, although it accounted for only a small number of city breaks.
In the UK, revenues for this summer are up 8 per cent and bookings up 9 per cent, and Friedrich Joussen, the TUI chief executive, said that the group remained “well positioned” to meet its target of delivering underlying earnings growth for the full year of at least 10 per cent.
TUI’s resilience compares favourably to the cautious update last week from Thomas Cook, which said that holidaymakers were putting off purchasing decisions in the aftermath of the spate of recent terrorist attacks. It said that its summer programme was 40 per cent sold after a 5 per cent fall in bookings.
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Analysts said that TUI was benefiting from its greater proportion of differentiated and exclusive holidays, which have an earlier booking profile. One said that although Thomas Cook was repositioning itself to follow suit it was “still playing catch-up”. with its larger rival.
Shares in TUI rose by 62p, or 6 per cent, to £10.90.