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Hotel BrandsTourism

TUI’s hotel arm drives growth

TUI, the German travel and tourism company has delivered double-digit earnings growth in financial year 2018 – for the fourth consecutive year – driven by the success of its hotel arm.

During the 52-week period ending 30 September 2018 the group’s transformation into a developer, investor and operator of hotels and cruise ships has helped the group see profits climb 10.9% to €1.22bn (£1.09bn). The group also saw its turnover jump 6.3% to 19.7bn (£17.7bn).

The group said that the transformation, initiated in 2014, has helped TUI’s business to deliver “considerably higher margins” and is less seasonal, reducing its “dependence on the summer months”. It said its TUI’s Hotels & Resorts, Cruises and Destination Experiences segments now account for 70% of the group’s underlying EBITA.

TUI Hotels & Resorts opened 16 new hotels in 2018 and now operates 380 hotels and resorts globally. It reported an increase of 19% in underlying EBITA during the period totalling 425.7m (£382.8m).

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TUI CEO Fritz Joussen said: “We are investing, we are growing with TUI’s high-margin products and services and our businesses are increasingly scaling. Today, our own holiday experiences content account for more than 70% of our earnings: hotels, cruises, excursions and destination activities. This enables us to clearly differentiate ourselves from the competition.

“With more than 20 million customers, use of state-of-the-art IT and intelligent customer systems, we have considerable potential for new business, turnover and earnings. We will continue our successful transformation: The next step will transform TUI into a digital and platform organisation.”

For financial year 2019, the TUI executive board said it expects to deliver growth in underlying earnings of at least 10% in a challenging market environment.

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