Tui: Iran War and Rising Living Costs Push Holidaymakers to Book Last Minute
Europe's largest travel company Tui says the war linked to Iran and the cost of living crisis are driving customers to delay booking holidays, with the conflict already costing the firm €60m.
Tui, Europe's largest travel company, says holidaymakers are increasingly waiting until the last minute to book trips because of ongoing uncertainty caused by the war in Iran and the cost of living crisis. In the weeks following the outbreak of war at the end of February, the company saw a temporary drop in demand for trips to Cyprus and Turkey, describing the situation as a "volatile market".
Tui's chief executive, Sebastian Ebel, said travel remains highly relevant to people's lives, but the timing of booking decisions has shifted. He noted that wars and geopolitical tensions, consumer caution, economic weakness and rising inflation in Europe's core markets have all affected consumer sentiment and purchase timing.
Ships stranded in the Gulf
Two Tui cruise ships, Mein Schiff 4 and Mein Schiff 5, were in the Gulf near Dubai and Qatar when the conflict broke out and were unable to continue through the Strait of Hormuz, leaving them out of service for 12 weeks. The company had to repatriate all 5,000 customers on board. The cost of these "bad luck incidents", including repatriation and lost income, totalled €40m, contributing to an overall war-related cost of €60m for the company.
Profits fall, but summer demand recovers
Between April and June, Tui's pretax profit fell 43% to €153m, down from €267m a year earlier, while customer numbers dropped 3% to just under 10 million. The company's markets and airlines division swung from a €50m profit a year earlier to a €17m loss, hit by weaker demand, high fuel prices and a competitive market.
However, demand for summer holidays has picked up over the past four weeks as peak season got under way, despite heatwaves across western Europe — destinations were often cooler than Germany itself. Hotel owners have invested in air conditioning for both rooms and common areas.
Ebel also said Europe's changing climate is encouraging more travellers to choose the "shoulder season" — March to May and September to November — when temperatures are cooler. Tui now flies to Heraklion in Crete in November and is discussing with local organisations whether restaurants there could stay open to serve tourists during that month.
