TUI Reports €25m Loss Due to Greek Wildfires, but Returns to Profit in Q3
TUI, the travel firm, has revealed that the recent wildfires in Greece cost the company approximately €25m (£21.5m). Despite this setback, TUI has returned to a third-quarter profit for the first time since the pandemic began.
The estimated cost includes expenses related to 12 repatriation flights, compensation payouts, and customer welfare. TUI had to cancel outbound journeys and evacuate 8,000 holidaymakers during the crisis in Rhodes. Although the Greek island accounted for around 5% of TUI’s summer schedule, the company stated that 80% of its guests there were “unaffected” by the fires.
In its quarterly statement, TUI reported underlying group earnings before interest and tax of €169m (£145m) in the three months to June. This figure represents a significant increase from the €27m (£23m) loss reported during the same period last year and marks TUI’s first third-quarter profit since the onset of the COVID-19 pandemic in 2020.
TUI also highlighted that average selling prices surged by more than a quarter compared to summer 2019 and were 7% higher than last year. The company attributed this increase to customers’ willingness to prioritize spending on holidays.
The estimated cost of the wildfires, amounting to £21.5m, will be added to TUI’s full 2023 results. However, the company remains optimistic about its overall performance for the year. TUI’s Chief Executive, Sebastian Ebel, stated that demand for holidays remains high and that summer 2023 is progressing well. He also mentioned that the Mediterranean continues to be the most sought-after destination for summer holidays.
Despite the wildfires in Greece, Mr. Ebel emphasized that the climate in the country is “not as it was described.” Nevertheless, TUI plans to diversify its portfolio of destinations to mitigate climate-related risks. The company expects regions with more moderate temperatures, such as the Nordic nations, to become increasingly popular.
Overall, TUI anticipates a successful travel summer and a profitable year in 2023.