by Josh Lew
Last updated: 3:30 PM ET, Thu December 10, 2015
PHOTO: Tenerife's Mount Teide in the Canary Islands. As travel to places like Egypt and Tunisia slows, tour operators are finding gains in new destinations such as Cyprus and the Canary Islands. (Photo courtesy of Thinkstock)
German tour operator TUI is the largest company of its kind in the world. Given everything that has happened this year, you would expect the company, and its rival Thomas Cook, to be dealing with a major slowdown. That is actually not the case. TUI recently announced that it expected its earnings for 2015 to be 10 percent higher than they were in 2014.
TUI did a lot of trade in two major North African destinations, Egypt and Tunisia. After terror attacks, tourist traffic has fallen significantly in both places. TUI was especially affected by the Tunisia attack earlier this year. Many of the 38 people killed in this massacre were in the country on packages purchased from the company.
Focus on new destinations
Instead of staying home, package tourists are simply finding other places to visit. According to TUI, there is now a lot of demand for trips to the Canary Islands and Cyprus, two destinations that are deemed safe. Earlier today, TUI's chief, Peter Long, told reporters that his company is in a good position to deal with such travel disruptions and to steer travelers to safer destinations if needed. Speaking of the suspension of travel to Egypt, he said "We have the ability to absorb this and still be comfortable with the guidance of at least 10 percent growth in earnings."
In addition to the Canaries and Cyprus, more tourists are heading to Cape Verde off the coast of West Africa. Others are going across the Atlantic to Mexico and the Caribbean.
Big travel firms able to cope
TUI is a huge company. Its current incarnation was formed last year after the merger of the UK's TUI Travel and Germany's TUI AG. Bigger firms like this are probably better equipped to deal with mass cancellations. After the Tunisia attacks, the company refunded more than 52 million Euros to people who had already booked trips to the North African country.
New destinations on the radar for travelers
On a deeper level, TUI's announcement shows that people are still going to travel even with all the terror-related news stealing the headlines this year. Perhaps these undeterred tourists are a little smarter than the media seems to be giving them credit for. People are paying attention to which places are still deemed safe to travel. All the destinations that are in demand for TUI customers have been deemed safe or even suggested by the U.K.'s Foreign Office and other "official" organizations that are tasked with keeping their citizens secure abroad.
Places like Cape Verde and the Canary Islands could really benefit if they are able to turn this temporary trend into an ongoing source of tourist traffic.
Waiting for Egypt to open up again
Monarch Airlines, a competitor of TUI and Thomas Cook, has also found that the Canary Islands are piquing travelers' interest. The airline has said that it is waiting for the British government to confirm that it is safe to resume flights to the Egyptian resort town of Sharm al-Sheikh. Meanwhile, it has increased service to the nearby Israeli resort town of Eilat.
Monarch has already canceled all flights to Sharm until Jan. 6. That is the earliest possible time that service could resume. The British government has announced that it is talking with Egypt about security in the Sinai, but there has been no timeline announced as far as lifting the ban on UK airlines flying into the region.
TUI's shareholders will certainly be happy with today's announcement. The travel industry in general should also take heart in the trend of people simply shifting their vacation plans elsewhere rather than staying home altogether.
For the latest travel news, updates and deals, subscribe to the daily TravelPulse newsletter.
Topics From This Article to Explore
