Tui Reports 10% Drop in UK Summer Holiday Bookings Amid Iran War

Europe's leading travel operator Tui has recorded a 10% drop in revenue from summer holiday bookings by UK customers. The decline stems from caution linked to the Iran war.

The company observed a shift in demand from Eastern to Western Mediterranean destinations. Customers are also booking trips closer to departure dates.

Tui plans to cut seats purchased from airline partners by 4 to 5% over the summer. It will keep its own flying program at current levels.

Chief executive Sebastien Ebel said he does not anticipate jet fuel shortages in the coming weeks, according to Reuters.

Concerns persist that without a quick reopening of the Strait of Hormuz, a vital route for oil and liquefied natural gas, physical shortages could emerge in some areas within months.

The strait's effective closure has driven up jet fuel prices. Some airlines have raised ticket prices, while others have reduced capacity to draw in reluctant customers.

In results for the first three months of the year, Tui took a €40 million (£34.7 million) profit hit from the US-Israel war with Iran. That included repatriation and welfare costs plus lost income.

The company posted an underlying loss before interest and tax of €188 million for the quarter, better than the €207 million loss a year earlier.

Tui reported a 7% overall decline in revenue from bookings for this summer compared with last year.

Russ Mould, investment director at AJ Bell, said the holiday and airline industry stresses there are no current fuel shortages, but consumers are getting jittery. He added that greater clarity on fuel sources beyond the Middle East is needed before the public commits to summer holidays.

Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said consumers have understandably grown more cautious about holiday spending. Still, holidaymakers do not appear to be scrapping vacation plans entirely.