Travel company TUI AG () delivered an 8.1% increase in first quarter turnover on the back of strong demand for holiday packages and a pick-up in Turkey and North Africa.

Turnover in the three months to December 31, 2017 rose to €3.5bn from €3.2bn the same period a year earlier, driven by growth in cruises, the hotels and resorts division and the ‘holiday experiences’ business.

The company said demand for trips to the Caribbean remained robust despite the disruption caused by hurricanes last year.

The underlying core loss narrowed to €25.4mln from €60.3mln the previous year and TUI said it was on track to increase underlying earnings (EBITDA) by at least 10% at constant currency this year.

Results included a €38mln gain on the disposal of three Riu hotels in the quarter, offset by a €20mln charge resulting from the bankruptcy of Air Berlin in December.

TUI held a wet lease contract with Niki, a former unit of Air Berlin, and had to renegotiate these agreements following the German carrier’s collapse.

The company said 2018 summer holidays are 35% sold with revenues up 8% and bookings up 6%, boosted by bookings for Greece, Turkey and Cyprus.

Winter holiday bookings for the 2017/18 season rose 3% and revenue increased 6% with growth in bookings for North Africa, Thailand, Cape Verde and Cyprus. 

TUI opened eight hotels over winter and plans a further eight openings in summer after shedding some of its less profitable Riu hotels. 

Given the good performance in cruises, the group plans new launches for its TUI Cruises, Marella Cruises and Hapag-Lloyd Cruises brands in 2018 and 2019 along with a new ship planned for Spring 2023.

Shares rose 2.01% to 1,626p.


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