For TUI Travel, the biggest tour operator in the world, has had an extremely good 2013. In fact, the company recently posted a 13 percent increase in its underlying operating profit. This group, which owns First Choice and Thomson, said that this increase was higher than the 11 percent increase it had expected to see. Thanks to these strong sales and the recovering economy, TUI Travel has very ambitious plans for 2014.
According to TUI Travel, this increase in profits has been thanks to an increase in interest in all-inclusive packages. It also says that Brits are starting to travel to further-away destinations. They are leaving Europe and traveling to other areas of the world. This, of course, results in higher profits for TUI Travel.
TUI Travel believes that its increase in profits will continue into next year as the economy continues to recover. The company said that it is very confident that it will reach its goal of increasing underlying profits by 7 to 10 percent next year. This is a trend that it hopes will continue for the next four years. The tour operator said that it will be encouraging sales over the next few years by offering summer and winter sales to entice people to travel more.
Peter Long, the chief executive of TUI Travel, said that the company is benefiting from a number of things. However, he said that one of the biggest things benefiting the company right now is the increase in sales to Egypt. Now that the British government has relaxed its travel advice to the country, Brits are starting to travel to Egypt again. This used to be one of the most visited places by Brits until the government started issuing travel warnings. Now, TUI Travel hopes to see holidays to Egypt continue to increase.
Thanks to this increase in sales, TUI Travel saw its shares jump 17 percent to 9.75 pence. This brings the full-year payout to around 13.5 pence per share. For TUI Travel and its shareholders, this is a 15 percent increase compared to last year.
Wyn Ellis, a Numis analyst, said that the UK is seeing an improvement in consumer confidence. This is not just seen in travel but also in the housing market. Economic growth and increasing employment is giving people confidence. This is something that will continue into 2014. This is a positive thing for all industries in the UK.
Of course, it is not just TUI Travel that has seen an increase in profits. TUI Travel’s biggest rival, Thomas Cook, has also been recovering from a huge slump in sales. During the last two years, the company has watched its profits slowly increase. Just last month, the company reported a 49 percent jump in earnings. This puts Thomas Cook back in the spotlight to challenge TUI Travel for first place.