* UK summer bookings now flat
* Shares drop almost 4 pct
* Confirms guidance for underlying EBITA rise of at least 10
(Recasts with comments on UK, shares)
By Victoria Bryan
BERLIN, May 15 Europe's largest tour operator,
TUI Group, said UK sales and bookings for the summer
had slowed, hitting its shares on Monday.
The fall in sterling against the euro following
Britain's vote to leave the European Union has made it more
expensive for Britons to holiday overseas and "staycations" are
enjoying renewed interest.
TUI said that summer bookings from British customers were
currently flat with revenues up 8 percent, a slowdown from
February, when it said UK summer bookings were up 3 percent this
year and revenues were 12 percent higher.
"There's no doubt that in the UK, times will be a little
more tough in the future than they have been in the past," Chief
Executive Fritz Joussen told analysts on Monday, after the group
reported first-half results.
He said it was doubtful whether the UK division would
maintain its profit margin this year, and the company would look
at shifting some capacity.
TUI's shares dropped 3.9 percent, the biggest faller among
European travel and leisure stocks. Shares in smaller
rival Thomas Cook, which reports results on Thursday,
were down 2.6 percent.
Tour operators have also been hit by a shift in demand away
from North Africa and Turkey to western Mediterranean
destinations due to security concerns.
Joussen said that TUI, which is investing in more of its own
hotels, would look to see if the situation in Turkey provided
any opportunities for the group to buy up distressed assets.
In Germany, TUI's airline TUIfly is benefiting from problems
at rival Air Berlin, which is restructuring amidst
record losses, Joussen said.
TUI plans to spin off TUIfly into a leisure airline joint
venture with Etihad, but the process has been slower than
expected. Joussen said it was a difficult project and the
company would rather take its time over the deal to ensure the
Overall, the group reported a second-quarter underlying
EBITA loss of 177.7 million euros ($194.2 million) at constant
currencies, against a loss of 126 million in the year-earlier
Adjusted for the late timing of Easter this year, the loss
for the first six months of the financial year improved 6.3
percent to 193.3 million euros, TUI said.
It confirmed a target to increase underlying earnings before
interest, tax and amortisation (EBITA) by at least 10 percent
($1 = 0.9150 euros)
(Reporting by Victoria Bryan; Editing by Maria Sheahan and