TUI AG, Europe's largest tour operator and owner of Ireland's Falcon Holidays, said demand for summer holidays in Turkey tumbled about 40 per cent following a suicide bombing at a tourist attraction in Istanbul last month.
Mid-2016 bookings for the popular travel destination fell as families that flocked to Turkey’s Mediterranean beaches seek alternatives after the bombing in January killed 11 Germans, TUI’s largest customer group.
Customers are instead planning holidays in Spain, contributing to a 13 per cent jump in average revenue per bed at TUI's Riu hotel chain and leading to a capacity squeeze in the country, chief executive Fritz Joussen told journalists on a conference call. Spain is "pretty much sold out," Mr Joussen said.
Pricing there and in other countries viewed as less prone to terrorism will remain high because hotel operators won’t have to offer last-minute discounts to fill empty beds, he said.
Recent terrorist attacks in Turkey, Egypt and Paris have made security a key concern for many vacationers. Shifting clients to similarly priced destinations is becoming increasingly difficult as empty beds in locations perceived as safer are becoming scarce.
While bookings for Turkey could still come later, a sustained drop will be hard for the travel industry to absorb. About one in seven of TUI’s customers went to Turkey last summer, and travel warnings by several governments have already closed parts of Tunisia and Egypt to European tourists since last year.
TUI fell 2.7 per cent to 1,068 pence as of 8.12am in London. The stock has dropped 12 per cent this year, valuing the company at £6.27 billion ($9.1 billion). Revenue in the fiscal first quarter ended December 31st rose 5.4 per cent to €3.72 billion, TUI said in a statement on Tuesday.
Bloomberg