HANOVER, Germany: TUI Group, the world’s largest tour operator, reported a 40 percent drop in bookings to Turkey this summer due to safety concerns and said it was investing in Cape Verde and Bulgaria as alternatives to security-threatened North Africa.
Turkey is especially popular with German tourists, but has seen demand slump after a blast killed 10 Germans in a busy Istanbul square in January. Russians have been told to stay away by Moscow following the shooting down of a military jet last year.
Turkey has since offered jet fuel subsidies in a bid to stimulate tourism demand.
TUI Chief Executive Fritz Joussen said that around 14 percent of its customers had traveled to Turkey last summer but it expects to send only 1 million tourists there this year, compared with just under 2 million in a usual year.
In addition, the Zika outbreak in the Americas is also troubling the travel industry, although Joussen said demand for the Caribbean was booming and that he expected only a small hit.
TUI has already seen a sharp fall in holidays to Tunisia and Egypt this winter.
But tourists shifting to Spain, in particular the Canary Islands, and Greece, prompted TUI to confirm its forecast for underlying earnings to rise by at least 10 percent on a constant currency basis.
“The Canaries is pretty much booked out,” said Joussen, who is now sole chief executive after co-CEO Peter Long stepped down at Tuesday’s annual general meeting.
Hotel unit Riu was able to increase prices by 13 percent in the first quarter of the current financial year, mainly since the increased demand in the Canaries meant it did not have to offer discounts on last-minute bookings.
But with a package holiday in a five-star hotel in Tunisia costing about the same as for a two-star hotel in the Canaries, TUI is looking for new destinations. Joussen said Bulgaria was comparable to Tunisia price-wise, while the group was also building hotels in Cape Verde.
“We are creating alternatives, but in the long term we believe demand will come back,” Joussen said, adding that he expected demand for Turkey to recover quickly.
TUI reported a first-quarter underlying loss before interest, tax and amortization (EBITA) of 101.7 million euros ($114 million), against a loss of 104.8 million one year ago. Travel companies typically report a loss in the first quarter.
It also took a 42 million euro hit from a writedown of its stake in shipper Hapag-Lloyd after a drop in its share price.
Its shares dropped 3 percent after Barclays cut its earnings per share target.
TUI looks to new holiday destinations as Turkey bookings slump
TUI looks to new holiday destinations as Turkey bookings slump
Closing Bell: Saudi benchmark index closes lower at 10,540
RIYADH: Saudi equities ended Wednesday’s session lower, with the Tadawul All Share Index falling 55.13 points, or 0.52 percent, to close at 10,540.72.
The sell-off was mirrored across other indices, with the MSCI Tadawul 30 Index retreating 5.79 points, or 0.41 percent, to close at 1,393.32, while the parallel market Nomu slipped 74.56 points, or 0.32 percent, to 23,193.21.
Market breadth remained firmly negative, as decliners outpaced advancers, with 207 stocks ending the session lower against just 51 gainers on the main market.
Trading activity moderated compared to recent sessions, with volumes reaching 123.5 million shares, while total traded value stood at SR2.72 billion ($725.2 million).
On the sectoral and stock level, Al Moammar Information Systems Co. led the gainers after surging 9.96 percent to close at SR172.30, extending its rally following a series of contract announcements tied to data center and IT infrastructure projects.
Al Masar Al Shamil Education Co. climbed 4.89 percent to SR27.48, while Naqi Water Co. advanced 3.36 percent to SR58.50. Al Yamamah Steel Industries Co. and Al-Jouf Agricultural Development Co. also posted solid gains, rising 3 percent and 2.86 percent, respectively.
Losses, however, were concentrated in industrial names. Saudi Kayan Petrochemical Co. fell 3.67 percent to SR4.73, while Makkah Construction and Development Co. slid 3.44 percent to SR80.
Saudi Tadawul Group Holding Co. retreated 3.28 percent to SR147.50, weighed down by broader market weakness, and Saudi Cable Co. declined 3.18 percent to SR143.
Alkhaleej Training and Education Co. rounded out the top losers, shedding just over 3 percent.
On the announcement front, BinDawood Holding announced the signing of a share purchase agreement to acquire 51 percent of Wonder Bakery LLC in the UAE for 96.9 million dirhams, marking a strategic expansion of its food manufacturing footprint beyond Saudi Arabia.
The acquisition, which remains subject to regulatory approvals, is expected to support the group’s regional growth ambitions and strengthen supply chain integration.
BinDawood shares closed at SR4.68, up 0.43 percent, reflecting a positive market reaction to the overseas expansion move.
Meanwhile, Al Moammar Information Systems disclosed the contract sign-off for the renewal of IT systems support licenses with the Saudi Central Bank, valued at SR114.4 million, inclusive of VAT.
The 36-month contract is expected to have a positive financial impact starting from fourth quarter of 2025, reinforcing MIS’s position as a key technology partner for critical government institutions. The stock surged to the session’s limit making it the top gainer.
In a separate disclosure, Maharah Human Resources confirmed the completion of the sale of its entire stake in Care Shield Holding Co. through its subsidiary, Growth Avenue Investments, for a total consideration of SR434.3 million.
The transaction involved the transfer of 41.36 percent of Care Shield’s share capital to Dallah Healthcare, with Maharah receiving the full cash proceeds.
Despite the strategic divestment, Maharah shares closed lower, ending the session at SR6.12, down 1.29 percent.
