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Tui says Iran war and higher living costs have hurt bookings
Tui reported a €60m hit from the Iran war so far, and said two Gulf-based cruise ships were out of service for 12 weeks after the conflict disrupted routes through the Strait of Hormuz.
Tui said the Iran war and the European cost of living crisis have driven consumers to delay holiday purchases, contributing to weaker demand and shifting booking patterns at the company. In the weeks after fighting began at the end of February, Tui recorded a temporary drop-off in customers wanting to travel to Cyprus or Turkey in what it called a volatile market.
The company said the war has cost it €60m so far. It also attributed €40m of that impact to what it called “bad luck incidents,” after two cruise ships, Mein Schiff 4 and 5, were in the Gulf in Dubai and Qatar when the conflict in Iran broke out, forcing them out of service for 12 weeks due to disruption through the Strait of Hormuz.
Tui’s chief executive Sebastian Ebel said travel remains important, but the timing of decisions has changed, pointing to wars and geopolitical tensions, consumer caution, economic weakness, and rising inflation in Europe’s core markets. He also said the need to repatriate 5,000 customers on board created significant costs, and lost earnings followed while the ships were not cruising.
Tui reported a 43% slide in pretax profits to €153m for April through June, down from €267m a year earlier. It also reported a 3% fall in customers during the same period to just under 10 million, and said its markets and airlines division swung to a €17m loss in the third quarter from a €50m profit a year earlier, driven by weaker holiday demand, high fuel prices, and a competitive travel market.