Tour operator TUI Travel Plc (TT.L) on Wednesday said the demand for its unique holidays sold through direct distribution channels continues to increase against a backdrop of uncertainty in the Eurozone. Citing its confidence in its strategy driving performance, the company said it continues to expect its fiscal 2013 underlying operating profit towards the upper end of growth targets. The shares increased around 3 percent in the morning trade on London Stock Exchange.
In its pre-close trading update ahead of reporting its results for the six months ending March 31, the company on May 10 said winter 2012/13 programs across mainstream markets are almost fully sold, and the season is ending strongly with improved margins and average selling prices across key source markets.
Total mainstream sales for winter as of March 17 increased 2 percent with a 5 percent growth in average selling price, while total customers declined 4 percent. Meanwhile, France tour operators' sales declined 25 percent with a 30 percent drop in total customers.
The company reported that very strong trading momentum continuing into Summer 2013, with UK and Nordic bookings up 9 percent, with higher margins. Total sales grew 7 percent with improvement in all markets, except France, while total average selling price increased 5 percent.
For summer, the company said it sees double-digit revenue growth in the UK and Nordic source markets. Average selling prices and margins across all key source markets are up year-on-year. Unique holiday bookings in the UK increased 15 percent, and the growth was 12 percent in Nordics and 9 percent in Germany for Summer 2013.
In Accommodation Wholesaler and Specialist & Activity, trading remains in line with expectations. The company added that accommodation wholesaler continues to build a global leadership position with TTV up by 10 percent for Summer 2013, driven by Latin America and Asia, where TTV is up by 19 percent.
Looking ahead for fiscal 2013, the company said it continues to expect underlying operating profit growth to be towards the top end of its roadmap guidance of 7 percent to 10 percent.
TUI Travel Chief Executive Peter Long said, "Our strong operational performance over winter means we will deliver reduced winter losses. This very strong trading has continued into Summer 2013, leaving us well placed to achieve a full-year performance towards the upper end of our growth targets."
The company added that the increasing demand for unique holidays highlightes that demand for the annual holiday remains resilient against a weak macroeconomic environment.
In addition, TUI Travel said its business improvement program is progressing to plan.
In London, TUI Travel shares are currently trading at 320.23 pence, up 9.83 pence or 3.17 percent.
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