Tui gets a boost from Caribbean breaks

Passengers are seeking the sun in long-haul destinations such as the Caribbean, with bookings up 16%

Tui, the world’s largest package holiday business, said yesterday that bookings for next year were up despite the increased security threat around the world.

Passengers are seeking the sun in long-haul destinations such as the Caribbean, with bookings up 16 per cent.

Holidaymakers are also turning to the Canaries and Cape Verde after flights to Sharm el-Sheikh in Egypt were halted over the winter following the bombing of a Russian plane.

Tui, which celebrates the merger of its German and UK businesses next week, said it expected to increase earnings by 10 per cent in 2016, demonstrating that “One Tui was better than two”.

Peter Long, joint chief executive, said that the company would resume holidays to Sharm el-Sheikh as soon as British and German authorities said it was safe. “All destinations recover – whether they will fully recover is another matter.”

He added: “As soon as our foreign offices tell us it is safe, we will at least reopen and in the end our customers will tell us if they want to go or not.”

Growth in the business is anticipated despite the killings of 33 Tui customers in Tunisia last June and the curtailment of all flights to Sharm el-Sheikh, which accounts for 50 per cent of the company’s Egypt business, in October.

The company said it can still deliver a 10 per cent improvement in earnings.

British bookings have risen by 4 per cent, with average selling prices 2 per cent higher. In long-haul travel, sales are up 16 per cent for the winter. UK summer sales are 11 per cent higher than at this point last year. “We believe we are well placed to deliver on our growth plans, despite the uncertainty we face in the world today,” Mr Long said.

The impact of the tragic events in Tunisia in June, and the suspension of holidays to the country, has cost the company £52m. Further guidance on the costs of pulling out of Sharm el-Sheikh will be provided next month.

For the year to the end of September, Tui said that underlying earnings of £724m were 15.4 per cent higher than last year, beating its own guidance of an increase of between 12.5 and 15 per cent.

The shares rose by 52p or 4.64 per cent to 1,173p.