TUI Group’s hotels, resorts and cruise businesses have been ‘growth drivers’ for the newly-merged group in its first quarter results, it has revealed.
The group, which was formed last year when TUI Travel and TUI AG merged, said its financial year had got off to a ‘good start’ after seeing its underlying EBITDA improve 24% in Q1 2014/15.
This still resulted in a loss of EUR107.9 million, but this improved from EUR141.1m year-on-year.
Within the same period the group’s turnover improved 5.4% to EUR3.54bn.
Its hotels & resorts arm saw a 4.3% increase in turnover to EUR197.9m for the quarter with RIU and Robinson performing well. Occupancy was up 3.6% to 77.6% with underlying EBITDA almost doubling to EUR51m.
Cruise has turned around for the firm with a EUR2m underlying EBITDA for the quarter, compared to a EUR15.9m loss year-on-year. New ships Europa 2 and Mein Schiff 3 helped the figures, with the former helping Hapag-Lloyd more than half its losses.
TUI Travel, known under the group as ‘the travel sector’, increased its turnover by 4.1% to EUR3.37 billion although saw a deeper loss of EUR149.1m compared to the same period last year. Its UK business remained stable but suffered in Germany and the Nordics.
“Our new financial year is off to a strong start. We will now have to preserve this momentum and our positive performance in order to maintain our profitable growth in future, too. To this end, we have launched various measures including the identification of areas, which we will define in greater detail in the next few months,” said Fritz Joussen and Peter Long, joint CEOs.
Its outlook for the financial year is to increase its underlying EBITDA by 10-15%, with the CEOs aiming to ‘take the group from good to great’.
Cruise will be a large growth area moving forward, with TUI aiming to become the leading cruise operator in Europe. The Mein Schiff 4 ship is on its way, while Hapag-Lloyd Kreuzfahrten is expected to break even this financial year off the back of buying Europa 2 and subsequently ending its charter contract.
Plans are also underway to modernise its five Thomson Cruises ships, which all serve the UK market.
A focus on more unique product as well as more marketing will be put in place to expand its mainstream business, while its airlines will be developed under a new structure.
Strategies are also being developed for the Hotelbeds-Group and specialist tour operators, all led by Will Waggott.