Spain rescues Tui Travel as Turkish holidays slump

With one-third of summer 2016 holidays now sold, the UK operation has also put in a strong performance, with bookings up 9% on the previous year

Spain is 'pretty much sold out' according to Tui's chief executive (Getty Images)

Holidaymakers are shunning Turkey and opting for holidays in Spain and the Canaries, according to Tui.

The world’s largest travel operator said that demand for summer holidays in Turkey has plunged by 40 per cent in the wake of the terrorist attack on tourists in Istanbul in January.

With around one in seven of Tui’s customers having travelled to Turkey in recent years, Friedrich Joussen, the chief executive, said the shift in demand was a significant challenge for 2016.

However, he insisted that Tui was still well placed as it has more hotels in the Canaries and Spain than other operators.

Despite the recent terrorist attacks in Paris, Tunisia, Egypt and Turkey, Tui reported a 7.2 per cent rise in underlying earnings in its first quarter.

Mr Joussen said trading for winter 2015 and summer 2015 was in line with expectations, “taking into account the geopolitical backdrop”.

The rush for Spain has contributed to a 13 per cent jump in average revenue per bed at Tui’s Riu hotel chain, leading Mr Joussen to say that Spain was “pretty much sold out”.

With Tunisia and Egypt closed to tourists until at least May on government advice, a sustained drop in demand for holidays in Turkey is likely to lead to higher prices elsewhere in southern Europe, and could be difficult for the travel industry to absorb.

However, Tui said it continues to expect underlying earnings to grow by at least 10 per cent in the full year. The traditional first-quarter loss in underlying earnings narrowed to €97.3m (£76.3m), from €104.8m a year ago.

Tui has sold 82 per cent of its winter 2015 holidays, with average selling prices up 3 per cent. Long-haul bookings have risen 10 per cent and UK holiday sales this winter have also increased by 3 per cent. Demand for long-haul holidays from the UK is up 16 per cent, with Jamaica, Mexico, the Dominican Republic and Costa Rica all popular.

With one-third of summer 2016 holidays now sold, the UK operation has also put in a strong performance, with bookings up 9 per cent on the previous year.

Peter Long, who oversaw the merger of UK travel operator Tui Travel and the German company, stepped down as joint chief executive of Tui. Already chairman of Royal Mail, he will join the travel group’s supervisory board.

Separately, Sir Stelios Haji-Ioannou has issued another salvo in his battle with directors of Easyjet. The airline’s founder – who made it clear he will vote a portion of his shares against the re-election of the company’s chairman tomorrow – said that directors were opting for a quiet life rather than opting for share buybacks that might increase Sir Stelios’s shareholding in the company.