Travel operator TUI AG (LON:TUI) raised its full year expectations for turnover on the back of strong demand for its hotels, cruises and holidays.
The company said it sees turnover for the year rising more than the 3% previously guided after delivering a 16.4% increase in the third quarter to €4.7bn from €4.2bn the same period a year ago.
It continues to anticipate a 10% increase in underlying earnings (EBTIDA) for the year following a 37% jump to €221.6mln from €160.90mln last year.
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Third quarter earnings growth was driven by an improvement at its Central Europe division and a robust performance in its cruises, and hotels and resorts businesses.
The group added that summer 2017 remains in line with its expectations, with customer volumes up 7% in the year to date and direct and online distribution rising 73% and 46% respectively in the quarter.
TUI achieved a quarterly increase in EBITDA in nearly all areas of its businesses apart from the Western Europe arm, which includes France, Belgium and the Netherlands.
Demand for holidays in the UK 'remains resilient'
While the Western region raised its share of bookings via direct and online channels, earnings were hit by a small loss following its acquisition of Transat France from Transat, along with rebranding costs for its Belgium unit.
TUI said a successful rebrand saw Benelux, the economic union of Belgium, the Netherlands, and Luxembourg, show an improvement in the quarter following the terrorist attacks at the Brussels Airport last year.
A rebranding of its UK division will be launched in autumn. Demand for holidays in the UK “remains resilient”, TUI said, despite the impact of rising inflation due to a slump in the pound following the Brexit vote.
The company has also been streamlining the business and in June decided to sell its specialist holiday arm Travelopia to KKR for £325mln. The disposal has been completed and proceeds of the sale will be used to strengthen the balance sheet and transform the rest of the business with a focus on its more profitable core hotel and cruise brands.