By Thomas Seal
Tunisia is set to return to Europe’s tourism map two years after a gunman murdered 38 mainly British holidaymakers in the resort town of Sousse, according to TUI AG, the region’s biggest tour operator.
Demand from the U.K. in particular is such that the North African state will probably feature in TUI’s coming vacation offerings, Chief Executive Officer Fritz Joussen said Thursday. Some 33 of the Sousse dead were clients of the Hanover, Germany-based travel group.
“It is something which is demanded by British customers, and therefore it is most likely to be a part of our program,” Joussen said on a conference call. Margins on U.K. sales are TUI’s highest, with bookings up on last year and prices rising, suggesting Britain will remain one of the company’s strongest markets even after it leaves the European Union, the CEO said.
The U.K. last month dropped a warning to citizens against traveling to Tunisia, opening the way for tour operators to resume sales to keenly priced resorts on the Mediterranean’s sun-drenched south shore. It still suggests that parts of the country, which remains under a state of emergency, should be off limits, and continues to ban the use of large electronic devices in the cabins of planes departing for the U.K., citing a “heightened risk of terrorism against aviation.”
TUI and rivals including Thomas Cook Plc have been striving to add capacity in established hotspots such as Spain, Greece and Italy after a wave of terrorist attacks discouraged travel to destinations including Turkey, Egypt and Tunisia, where the June 2015 Sousse killings a man opened fire on sunbathers on the beach and at two nearby hotels. Clients’ security concerns appear to be easing, according to TUI, with a spate of late bookings for Turkey and North Africa.
British bookings this summer are matching last year’s high levels made mainly before the Brexit referendum and slump in the pound that’s reduced the buying power of holidaying Britons. Joussen said last in June that he expected sterling to weigh on demand and represent a bookings headwind.
TUI reported a 19 percent gain in profit for the third quarter through June, with underlying earnings before interest, tax and amortization climbing to 191 million euros ($224 million), excluding the impact of a late Easter. The group, which generally loses money in the fiscal first half during the northern winter and generates the bulk of profit in the fourth quarter, also posted a positive nine-month result for the first time, aided by its cruises business.
Full-year sales should increase by more than the 3 percent previously forecast, TUI said in a statement, while reiterating a target for earnings growth of at least 10 percent. The stock was little changed as of 11:29 a.m. in Frankfurt.