By Greg Wright

Published 9th Aug 2023, 09:04 BST

Updated 9th Aug 2023, 09:04 BST

The Germany-based airline and package holiday group said there will be extensive costs for cancellations and lost business, compensation for customers, and repatriation flights. It evacuated 8,000 guests from Rhodes after wildfires broke out last month, with around 5 per cent of all its flights going to the Greek island in the summer.

But it stressed that 80 per cent of its guests there have been unaffected.

The events only affected demand in the short term, with bookings for the last week 5 per cent higher than the equivalent period last year, it said.

Travel agent Tui has revealed it is expecting a 25 million euro (£21m) hit from wildfires in Rhodes last month, despite saying the blazes and heatwave sweeping across parts of Europe only “temporarily” dampened demand for holidays. (Photo by Andrew Matthews/PA Wire)

“For the customer it has once again been shown that the package tour booked with the tour operator offers great advantages and comprehensive service in extraordinary situations”, Tui said.

The financial impact will be reflected in the firm’s full-year results.

The group revealed it swung to a third-quarter profit for the first time since the beginning of the pandemic. Sales jumped as average selling prices surged by more than a quarter compared with summer 2019, and 7 per cent higher than last year. Tui said the price increases reflect the popularity of summer holidays and its customers’ continued willingness to prioritise spending on travel and experiences.

The firm reported underlying group earnings before interest and tax of 169 million euros (£145m) in the third quarter, up from a loss of 27 million euros (£23m) this time last year.

Revenues surged by 19 per cent to 5.3 bn euros (£4.6bn) and summer bookings have been 6 per cent higher compared with last year, due to more bookings and higher prices.

Total bookings are about 95 per cent of pre-pandemic levels, Tui said.

Chief executive Sebastian Ebel said: “Summer 2023 is going very well and demand for holidays remains high.

“The Mediterranean remains the most sought-after destination for summer holidays.

“The heatwave in northern Europe in June and the wildfires in southern Europe have only dampened temporarily the previously strong development – but overall it will be a very good travel summer and a good year for Tui in 2023.

“For the full year we continue to expect a significant year-on-year increase in underlying earnings before interest and tax (EBIT).

“We are investing today to continue to significantly grow profitably in the future.”

Last month, Paul Charles, CEO of travel PR firm PC Agency, warned that wildfires in the Mediterranean will “clearly happen again” and the travel industry needs to “rework its plans”.

Mr Charles called for an overhaul of the Foreign Office travel advice system which left holidaymakers “confused and worried about losing their money”.

Tui expects £21m hit from Rhodes wildfires but holiday demand remains high