The wave of terror attacks and geopolitical uncertainty in and around Turkey has caused a 40% drop in summer bookings to the country at travel agent TUI (TUI).
The owner of the Thomson and First Choice brands says there has been a significant shift in demand away from Turkey, sending the shares down 3.4% to £10.61.
Despite this, TUI has kept its forecast for underlying EBITDA (earnings before tax, depreciation and amortisation) to rise by at least 10% this financial year, saying customers are instead choosing to holiday at its own hotels in Spain and the Canary Islands.
The group’s underlying EBITDA loss narrowed by 3% to €101.7 million in the first quarter to 31 December.
It says summer trading remains in line with its expectations, after taking into account the geopolitical backdrop, with bookings up 1% and average selling prices up 2%.
TUI has cancelled its summer Tunisia programme following the June beach attack and it was also forced to cancel flights to and from the Sharm el Sheikh holiday resort in Egypt after the bombing of a Russian plane in November.
‘Whilst the geopolitical unrest has naturally had an impact to the company, investors should note that it has been partly offset by its business mix across the UK and northern Europe, courtesy of brands such as First Choice, Unijet, Thomson, Sunquest and Airtours,’ says Graham Spooner, investment research analyst at The Share Centre.
TUI’s share price has slipped 5.5% over the last 12 months.
