Tui sees losses more than double after heatwave hit

Holiday giant Tui has blamed last year’s “unusually long and hot summer” and the weak pound as first-quarter losses more than doubled.

The group – which last week sent shares tumbling after warning over full-year profits – reported seasonal underlying losses of 83.6 million euros (£73.3 million) for the three months to December 31 against losses of 36.7 million euros (£32.2 million) a year earlier.

It said results were impacted by last year’s prolonged hot weather across northern Europe, combined with the Brexit-hit pound and overcapacity in western Mediterranean destinations, such as the Canary Islands.

The group said summer 2019 bookings were “broadly” in line with a year earlier and holiday prices had held firm, but cautioned its profit margins were taking a hit.

“The market environment for all tour operators remains challenging,” it added.

Tui sparked a hefty fall in shares last week when it warned underlying earnings for the year to September 30 were now expected to come in flat at around 1.17 billion euros (£1 billion).

This compares with previous guidance for at least 10% growth in earnings.

Tui had previously been seen to be weathering the market woes that have already knocked rivals such as Thomas Cook, which is now looking at a possible sale of its airline business.

Fritz Joussen, chief executive of Tui, said: “The overall trends for our sector are intact.

“Travel and tourism remain a growth market.

“Customers continue to travel, but they are currently resistant to increases in price.”

Over its first quarter, Tui said turnover rose 4.4% to 3.7 billion euros (£3.2 billion).

Its markets and airlines arm – which is bearing the brunt of the tough industry conditions – saw losses widen to 177.7 million euros (£155.8 million), up from 140.8 million euros (£123.4 million).

Its holiday experiences division – which accounts for 70% of annual earnings and includes hotels and resorts and cruises – posted an 11.8% fall in earnings to 111 million euros (£97 million).

But the group said overall customer numbers grew by 1.2% in the first quarter.