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Thomson and First Choice owner TUI reveals cost of terror attacks

Published 10/12/2015

Peter Long said he was still living with the
Peter Long said he was still living with the "horror" of the Tunisia attack

The boss of Thomson and First Choice owner TUI said the beach massacre in Tunisia that claimed the lives of 33 of its customers was the "most tragic" event in his 30-year career as the group laid bare the financial impact of recent terrorist attacks.

The travel giant took a 52 million euro (£37.6 million) hit from the Tunisia attack in June and cut its guidance for the year ahead after cancelling all flights to Sharm el-Sheikh in Egypt following the terrorist bombing of a Russian airliner last month.

Peter Long, joint chief executive of TUI Group, said the past year saw the group experience "the most tragic event that I've ever had to deal with in my 30 years in the industry".

He added: "The horror of it is something that will live with us, and me, forever."

But he praised the staff's handling of the tragedy, which saw the group fly home tourists from the North African country and cancel all holidays there, with the UK Foreign Office and other governments still advising against visits.

The group said its hotels and resort arm saw a 26 million euro (£18.8 million) impact from the Tunisia beach attack, with another 17 million euro (£12 million) put by to cover prepayments for accommodation in the area.

In August, TUI confirmed the cost of flying tourists home from the North African country was 10 million euro (£7.2 million).

Strong trading and currency exchange rates helped it offset the cost as i t posted a 23% leap in underlying earnings to 1.07 billion euro (£775 million) for the year to the end of September.

But the group said the ongoing cancellation of flights to and from Sharm el-Sheikh was now expected to see current year earnings rise by at least 10%, against previous expectations for an increase of 12.5% to 15%.

TUI has 13 hotels in Sharm el-Sheikh, with the resort accounting for half of its business in Egypt.

Mr Long said resorts in Tunisia and Sharm el-Sheikh were like "ghost towns" following the attacks, adding it remains to be seen if it will ever fully recover.

Holidaymakers have been switching to destinations such as the Canary Islands as well as long-haul resorts, with demand increasing for holidays to Mexico, Mauritius and the Caribbean.

TUI said long-haul bookings were up 16% for the winter season.

Overall UK bookings are 4% higher for the winter season and average selling prices are up 2%, with just over half of its winter programme sold so far.

It added that trading for the summer 2016 season was strong, with bookings ahead by 11% and nearly a quarter of the programme already sold.

Shares in TUI rose 5% after the full-year report.

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