TUI: Greece, Spain to Benefit from Drop in Demand for Turkey

Greece and Spain are expected to benefit this summer from a shift in demand for Turkey, according to TUI Group.

While delivering data on its first quarter performance on Tuesday, the travel giant said it has recorded a decline in demand for Turkey due to security concerns. Summer 2016 bookings to the destination are currently down by around 40 percent.

According to Reuters, in response to the drop in bookings to Turkey, TUI has shifted capacity to Spain and Greece. The company’s own hotels in destinations outside Turkey such as Spain and in particular the Canary Islands are benefitting from this shift in demand.

Last summer, some 14 percent of TUI’s customers had travelled to Turkey, with the destination being especially popular with Germans. “But after a suicide bomb killed 10 German tourists in Istanbul in January, demand had slumped”, Reuters noted.

TUI on Tuesday reported a narrower first quarter underlying loss before interest, tax and amortisation (EBITA) of 101.7 million euros ($114 million), against a loss of 104.8 million one year ago. “The first quarter loss, which is always generated in any financial year due to the seasonal swing in tourism, improved versus financial year 2014/15”, the company said in a statement.

TUI kept a forecast for underlying earnings to rise by at least 10 percent on a constant currency basis, despite the drop in demand for Turkey.

“Based on current trading and due to the resilience of our integrated business model, we remain convinced that we will be able to deliver the announced underlying EBITA growth of at least 10 percent in the full financial year 2015/16.”