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Travel Shares Of TUI Drops Despite Of Positive Forecast

Travel Shares Of TUI Drops Despite Of Positive Forecast

The largest tour operator of Europe, TUI Travel in a recent report revealed their confidence about their growth. They strongly believe that they would be able to earn a profit of at least 10pc in the current year. This is worthy to mention in the case that although the company has faced quite a difficult trading in France, they did not lose their hope to reach their profit. The incident of the France occurred as the tourists deny accepting the holiday package to North Africa.

Travel Shares Of TUI DropsIt is reported that this morning the shares in TUI has suffered the largest intra-day drop since May last year. James Hollins, an Investec analyst pointed out that reason behind this is perhaps a marginal weakening of the business since the company last updated three months ago.

The FTSE 100 leisure giant that owns First Choice and Thomson stated that operating profit in the previous three months to June 30 increased from £13m to £87m in comparison to the same period of the previous year. However, it is significant that this figure excludes the expenditure of aircraft returning empty from destinations at the beginning and end of every season.

According to a report, combination of the travel business of TUI’s German parent company and Britain’s First Choice generated the holiday giant in the year 2007. Sources revealed that the company has sold 84pc of mainstream products of summer holiday. In addition to this, the company has already started to sell products of next winter.

Peter Long, long standing chief executive of TUI expressed that in the current position they are quit confident about the fact that they would achieve whole year based on the operating profit growth of minimum 10 pc on a constant currency basis. He further added that they are in such a well position that they are able to deliver their five-year roadmap of growth.

Mention in this context must be made up of the summer sales that are increased by 11pc in the United Kingdom in comparison to 2012. It is remarkable that the average selling prices are also seven pc ahead of the previous year.

However, experts are of the opinion that the target can not be fulfilled as this year Britain is experiencing an outstanding weather which can encourage more individuals to stay in home and enjoy their holidays.

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TUI’s sales are 2pc ahead in the market of Germany are 2pc ahead although total numbers of customers has fallen by 5pc.

However, in France TUI is facing difficulty. As per information, several other tour operators face similar problem. Experts believed that visitors preferred to stay in home in order to save money. Moreover, the visitors due to political unrest in different countries like Egypt avoid their trips to North Africa, which is the most favorite destination of most of the French.

TUI stated that the sales of summer have decreased to 20pc in France. The company also informed that they are reducing the number of trips to North America.

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