Holiday firm Tui counts the cost of Egypt and Tunisia unrest

Tui has cancelled all holiday bookings for Egypt from Germany, France, Belgium, the Netherlands and Scandinavia, but is still running holidays booked in the UK for the Red Sea resorts ‘in line with government advice’ Tui Travel, Europe’s biggest travel company, has warned that the unrest in Egypt and Tunisia will cost it up to £30m as customers cancel or reschedule holidays. As the clashes in Egypt turned increasingly violent , Tui said this morning that the current “economic and geopolitical uncertainty” casts a shadow over its outlook for 2011. “Early indications are that customers are choosing to rebook to alternative destinations and we are taking action to remix our programmes in line with customer demand,” said the company, which runs Thomson Holidays and First Choice. “The Egypt and Tunisia situation could impact the second-quarter result by £25m to £30m.” Tui has cancelled all holiday bookings for Egypt from Germany, France, Belgium, the Netherlands and Scandinavia, but is still running holidays booked in the UK for the Red Sea resorts “in line with government advice”. This means that, at present, UK customers would not get a refund if they cancelled their trip. “If we are not able to operate any further holidays to Egypt for the rest of the winter from any source market except for the UK, we estimate the second-quarter impact will be approximately £20m. If UK government advice changes and we can no longer operate from that source market we would expect the impact to increase by approximately £5m,” Tui said. It has incurred further costs of £5m in Tunisia to repatriate customers and from the cancellation of holidays. The comments came as the travel company reported a smaller underlying operating loss of £84m in the quarter to December (its first quarter), compared with £107m a year earlier. The Middle East turmoil is the fourth blow to Tui in the last year. The eruption of the Eyjafjallajökull volcano left around 100,000 customers stranded last spring, and bookings late last year were hit by the poor wintry weather. The company has also discovered a £117m black hole in its accounts . “The short-term impact from the events in North Africa is overshadowing the underlying strategic progress that is being made at Tui Travel,” said Nick Batram at Peel Hunt. “The impact on underlying earnings is uncertain at this stage and will depend on the margin delta on re-bookings. Our underlying profit forecast for 2011 is therefore under review.” Tui Travel Travel & leisure Egypt Middle East Tunisia Julia Kollewe guardian.co.uk

Posted by on February 3, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry