TUI narrows first-half loss amid growing demand for holidays

Thomson owner TUI Travel narrowed its losses in the first half of the year, on the back of increased bookings across its hotels and cruises businesses.

In the six months to the end of March, the group's total loss declined 19.2% year-on-year to €362.2m (£305.7m, $396.2m), while revenue on a constant currency basis rose from €6.1bn to €6.6bn. Meanwhile, underlying earnings at constant currency, excluding the impact of a later Easter this year, improved to a loss of €193.3m, compared with a €206.4m loss in the corresponding period last year.

The FTSE 100-listed group, the world's largest tour operator, said the positive half-year performance was largely due a steady growth in bookings. Reservations for the summer are in line with expectations, with weaker demand for destinations such as Turkey and North Africa largely offset by increased demand for Spain, the Canary Islands, Greece, Cyprus, Cape Verde and the Caribbean.

As a result, revenue and customer numbers for the summer are 8% and 4% ahead of last year's figures respectively.

"Whilst the turbulent macroeconomic and geopolitical backdrop is evident in certain destinations and markets, our operational experience, integrated model and balanced portfolio [...] mean that we are well placed to deal with these challenges and continue to deliver sustainable growth into the longer term," the company said.

TUI, which was formed in 2014 by the merger of UK-based TUI Travel and German majority owner TUI AG, added it remains on track to achieve underlying EBITA growth of at least 10% in the current financial year.

In May, the group unveiled plans to slim down its operations even further by selling its specialist group of adventure and education holiday brands Travelopia to private equity firm KKR. On Monday (15 May), it said the €281m deal would be completed later this year.