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Holidaymakers give Tui a surprise boost

Germany's biggest travel agency Tui has unexpectedly hit the black - thanks to the Germans and British going on holiday despite uncertain economic times.

Holidaymakers give Tui a surprise boost
Photo: DPA

The business year 2012-13, which in Tui's accounting system ended in September, showed a surplus of €4.3 million, compared to a deficit of €15.1 million in the year before, the company said on Wednesday.

Analysts asked for their forecasts by Reuters journalists had predicted a loss of €27.4 million, the Handelsblatt business newspaper reported.

But strong demand for exclusive holidays, the sale of a hotel, and less loss from the Hapag-Lloyd container shipping subsidiary fed into strong figures from British and German holidaymakers to turn the numbers around.

Shareholders will get a dividend of 15 cents per share – the first time dividends have been paid since 2007. Then the payment was 25 cent a share.

Tui's CEO Friedrich Joussen, only moved from telecoms firm Vodafone early this year to head up the holiday giant – not only Germany's but Europe's biggest tourism group. He has been restructuring Tui, to reduce costs and try to make the company sharp enough to take on internet-based rivals.

But that restructuring added €57 million to costs last year, the Handelsblatt said.

The major problem facing Tui lies in the fact that its travel business is almost completely concentrated on one market – the UK. Tui Travel in the UK provides more than 95 percent of the group's turnover. Last year the turnover reached €18.5 billion.

It operates 3,500 travel agent shops across Europe.

READ MORE: Majorca: boozy Germans no longer welcome

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TRAVEL

Could sleeper trains offer Germans cheap, low-carbon travel across Europe?

Several political parties in Germany have said they want to bring back sleeper trains in order to meet carbon emissions targets.

Could sleeper trains offer Germans cheap, low-carbon travel across Europe?
A sleeper train in Austria. Photo: dpa/APA | Georg Hochmuth

The Green party have said that they want to put state subsidies into night trains that will connect Germany with cities as far flung as St Petersburg in the north and Lisbon in the south.

According to the environmentalist party’s plans, 40 night rail lines could connect 200 destinations across the continent including islands like Mallorca, which would be linked in by train and ferry.

The Greens want the EU to buy a fleet of sleeper trains that could travel at speeds of between 200 km/h and 250 km/h.

The CDU have also announced plans to rebuild the country’s sleeper train services.

Deutsche Bahn stopped its last sleeper service in 2016 citing the high costs involved in maintaining its fleet that was not recuperated through ticket sales.

Earlier this year the state owned company said it had “no plans” to purchase new sleeper wagons.

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