Travel giant Tui braced for a £29 million blow from Tunisia terror tragedyComments Off on Travel giant Tui braced for a £29 million blow from Tunisia terror tragedy
The “horrific” terror attack in Tunisia, which left 38 people dead, will cost tour operator Tui up to €40 million (£28.5 million) this year, chief executive Peter Long has admitted.
Gunman Seifeddine Rezgui’s attack on a crowded Sousse beach in June claimed the lives of 33 Tui holidaymakers, of which 30 were from the UK.
Tui, owner of Thomson and First Choice, has already taken a €10 million hit in cancellations and repatriation costs.
But the company manages 24 hotels in Tunisia, now virtually empty as a result of the attack, which will cost it between €25 million and €30 million in the current quarter.
TUI sends just under half a million sunseekers to Tunisia every year, accounting for around 3% of its overall programme, although Foreign Office guidance now advises against travel to the country.
Long said that “our thoughts remain with the families whose lives have been devastated as a result of this horrific attack”.
But he added that “we don’t know” how long it would take for tourists to return to Tunisia in significant numbers.
“Ultimately we will not make a decision regarding the recommencement of our programmes until the Foreign Office advice is lifted and it is safe to travel again.”
Long stressed the “depth of sorrow” in the organisation and the “incredible concerns” over the security of its customers, adding: “To be quite frank, it will be a combination of our thoughts about that and what our customers are telling us about their desire to go back to the country.”
Holidaymakers were also deterred from booking trips to Greece in late June and early July due to concerns over its potential exit from the euro, particularly hitting German holiday sales, although bookings have recovered since then.
Rival operator Thomas Cook recently flagged up a £25 million profit hit from events in Tunisia and Greece.
But despite the tragedy, TUI’s UK business remains strong and it managed “robust” overall trading, selling 86% of its holidays for this summer.
Underlying profits for the April to June quarter were up 18% to €194 million and moreover TUI expects to grow full-year profits by between 12.5% and 15%, at the upper end of its previous guidance.
In the UK TUI has sold 91% of its holidays with Ibiza, Cyprus and Turkey in demand, as well as Jamaica and Mexico outside Europe.
Shore Capital analyst Greg Johnson said: “Overall, we see this as a robust statement from TUI, when set against the geopolitical events in the period.”