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(Sharecast News) - Travel firm Tui reported a fall in third-quarter operating profit on Wednesday as fuel costs rose and demand weakened due to geopolitical uncertainty.
Third-quarter underlying earnings before interest and tax fell to 234.6m at constant currency from 320.6m in the same period a year earlier. Tui said the results reflected heightened geopolitical uncertainty, which influenced customer booking behaviour, and a 20m one-off impact from the Iran war. Revenue also declined, to 5.8bn from 6.2bn a year earlier.
Underlying EBIT in Hotels & Resorts fell 8.6% to 122.7m, while the cruises business saw a 10.3% decline to 132.4m. In Holiday Experiences, underlying EBIT was down 16.5% to 277.8m, while Markets + Airline swung to an underlying loss of 17.4m from a profit of 49.7m.
Chief executive Sebastian Ebel said 2026 had been "no ordinary year" but that Tui had "held its own well in a difficult global environment".
"Our business model is proving to be resilient. Travel remains highly relevant to people's lives, but the timing of travel decision has shifted," he said. "Wars and geopolitical tensions, consumer caution, economic weakness and rising inflation in Europe's core markets - all these factors have influenced consumer sentiment and the timing of purchasing decisions."
At 1230 BST, the shares were down 1.2% at 7.28.
Dan Coatsworth, head of markets at AJ Bell, said: "Softer demand and higher fuel costs have clouded the situation for Tui. The failure of US-Iran peace talks to end the Middle East conflict has thrown a spanner in the works for the travel industry, and operators are having to take it one day at a time.
"In July it looked as if the Iran war was on the cusp of ending, and oil prices had fallen back to pre-conflict levels. That gave hope to airlines and holiday companies that the summer season wouldn't be a write-off. Worries about potential fuel shortages down the line started to fade, and travel bookings picked up.
"Unfortunately, tensions have once again become elevated in the Middle East. That's led to a rebound in oil prices. High temperatures across major holiday destinations and wildfires have made matters worse and caused anxiety among holidaymakers.
"Tui is keeping its chin up, saying people are still travelling - they're just booking at the last minute. Investors aren't buying into management's confidence, with the shares falling on the latest results."