Arab Spring Dents TUI Travel Bookings From France: London Mover

TUI Travel Plc (TT/), Europe’s largest tour
operator, fell the most in more than a year after political
turmoil in northern Africa kept French customers from taking
trips to the region.

TUI will continue reshaping its offerings in France “with
far less emphasis on North Africa” after summer bookings from
the country fell 22 percent through July 28, a quickening pace
from a 15 percent drop through May 5, the Crawley, England-based
company said today in a statement.

The shares fell 5.2 percent to 380.8 pence in London, the
biggest drop since May 2012 and the second-largest decline among
companies on the FTSE 350 Index.

“The political unrest that started about two years ago,
the Arab Spring,” has diminished the popularity of North Africa
as a tourist spot, said Mike Ward, a spokesman for TUI Travel.

Troubles are persisting in Tunisia and in Egypt, where
Islamist President Mohamed Mursi was toppled on July 3, while
his supporters have refused to end street protests demanding his
reinstatement. At least 130 Mursi backers were killed by
security forces in Cairo last month, and governments including
Germany and the U.K. have issued travel warnings.

TUI Travel’s stock decline came as the company reiterated a
forecast for full-year underlying operating profit growth of at
least 10 percent, excluding currency swings. Revenue in the
mainstream business in the U.K. increased 11 percent through
July 28 from a year earlier and advanced 10 percent in the
Nordic region, as both customer numbers and prices rose.

Bookings Decelerate

Even so, summer sales bookings weakened heading into
summer, with business in top European markets decelerating since
the first half, according to James Hollins, an analyst at
Investec who maintained a hold recommendation on the stock.
“There may be disappointment at guidance not being raised
more,” reflecting a weakening of trading, he said in a note.

Summer customer numbers in the company’s mainstream
business declined 2 percent through July 28, after holding
stable at the prior year’s level as of May 5, TUI Travel said.

“Across Europe and the Nordics, the overall environment is
good, with the exception of France, which is very weak, and
that’s probably likely to stay, and that’s what we are assuming
in our plans when we look at the French business,” Chief
Executive Officer Peter Long said on a call with journalists.

Today’s decline pares the gain for this year to about 35
percent, making TUI Travel the second-best performer in the 10-member Bloomberg Europe Leisure Time Index, behind Thomas Cook
Group Plc.

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To contact the editor responsible for this story:
Benedikt Kammel at

TUI Travel Says All Markets Robust Except France

Aug. 7 (Bloomberg) — TUI Travel Plc Chief Executive Officer Peter Long discusses third-quarter revenue, consumer demand and the outlook for full-year operating profit.
He talks with Mark Barton and Manus Cranny on Bloomberg Television’s “Countdown.” (Source: Bloomberg)