German-based Travel giant TUI Group increased its underlying EBITA by 12%, with turnover up 11.7% for fiscal 2017 (1st October, 2016 to 30th September, 2017).
Despite a challenging market environment, TUI again outperformed its guidance of delivering at least 10% growth in underlying EBITA, the company said in its Annual Report.
“For the third consecutive year, we have delivered double-digit growth in our operating result. More than half of our earnings are delivered by TUI’s hotel and cruise companies.
“Our successful strategic realignment is also clearly reflected in our set of results. Thanks to the strong growth of our hotel and cruise brands, TUI now delivers stronger margins and is less seasonal. Our business profile is now much more evenly structured across the entire year. The clear focus on investments in high-margin hotels and ships was the core of the strategy for the new TUI following the merger in 2014,” said TUI CEO Fritz Joussen (pictured).
“We are investing in new hotels and modern cruise ships. And we pay an attractive dividend to our shareholders. We are seeking to continue this path.”
Group turnover was €19.2 billion, compared to €17.2 bill for fiscal 2016 at constant currency. Including foreign exchange effects, turnover also rose substantially by 8.1% to €18.5 bill. Underlying EBITA at constant currency climbed to €1.12 bill, compared to just over €1 bill for the previous fiscal year. Including foreign exchange effects, it grew by 10.2% to €1.102 bill.
TUI has consistently transformed itself and has become a completely different organisation over the past five years. “TUI 2017 is not comparable with TUI 2012,” said Joussen. “While the Group in essence was a tour operator, TUI is now a developer, investor and operator of hotel and cruise businesses. We will continue to invest in our own hotel and cruise companies to generate further growth.”
The Group said it aimed to tap new customer groups in growth regions such as China and Southeast Asia, based on a fully digital approach and co-operation with local partners. These countries are characterised by the emergence of middle classes that are only starting to discover travel.
As for the Group’s cruise segment, since the first half of financial year 2017, this segment has included the results of all three cruise companies – TUI Cruises, Marella Cruises (formerly Thomson Cruises) and Hapag-Lloyd Cruises.
In the period under review, it delivered substantial earnings growth and a significant increase in average rates:
– Underlying EBITA: +33.9% to €255.6 mill (previous year €190.9 mill)
– Underlying EBITA at constant currency: +38% to €263.4 mill.
Average rate per passenger per day (previous year figures shown in brackets):
TUI Cruises €173 (previous year €171).
Marella Cruises £131 (previous year £121).
Hapag-Lloyd Cruises €594 (previous year €579).
TUI Cruises 101.9% (previous year 102.6%).
Marella Cruises 101.7% (previous year 100.6%).
Hapag-Lloyd Cruises 76.7% (previous year 76.8%).
In June, 2017, ‘Mein Schiff 6’ joined TUI Cruises’ fleet. In 2018, the new ‘Mein Schiff 1’ will be launched by TUI Cruises. The Marella Cruises’ fleet has continued with its modernisation, launching ‘Marella Discovery 2’.
The fleet operated by TUI’s subsidiary Hapag-Lloyd Cruises will also be expanded and modernised in the medium term: In calendar year 2019, the new builds ’Hanseatic nature’ and ‘Hanseatic inspiration’ will join the fleet as luxury expedition cruise ships.