Europe's biggest travel operator, Tui, has revealed a notable shift in holiday preferences among European travellers, with demand for trips to the United States declining sharply as destinations like the Emirates and Asia gain popularity. The company's chief executive, Sebastian Ebel, highlighted that Tui is experiencing "significantly lower demand" for travel into the US, attributing this trend to lingering concerns around former President Donald Trump's immigration policies and a broader waning appetite for long-haul travel across the Atlantic.
Shifting Travel Patterns Amid Political Climate
According to Ebel, the decline in US bookings is offset by a surge in interest for other regions. "What we do see is growing business to the Emirates and Asia," he stated. Additionally, European demand for Caribbean holidays is showing potential for growth, despite past capacity constraints that limited its priority. This shift comes as several European countries have issued travel advisories for the US, citing stricter border scrutiny, detentions of visitors, and protests over the Immigration and Customs Enforcement (ICE) agency.
Impact of Trump-Era Policies on Tourism
Since Trump took office, reports have emerged of tourists being detained and interrogated at US borders, individuals with work permits sent to ICE detention centres, and cases of wrongful deportations. These incidents have contributed to a cautious atmosphere among European travellers. Overseas visits to the US from western Europe dropped by 4% in December compared to the same month last year, according to the US National Travel and Tourism Office. Ebel noted that last year, Tui observed a "significant decline" in travel to the US, influenced by factors including "the atmosphere, what you hear from border control."
Broader Trends in Long-Haul Travel
A report by the European Travel Commission supports this trend, finding that 42% of long-haul travellers from countries like Australia, Brazil, Canada, China, Japan, South Korea, and the US are considering a trip to Europe this year, down from 45% last year. In the US specifically, only 34% intend to travel to Europe, a decrease from 37%. This indicates a broader cooling of transatlantic travel demand, not limited to European outbound tourism.
Tui's Financial Performance Despite Challenges
Despite the weaker demand for US holidays, Tui reported its best first quarter in just over a decade. The German travel operator, headquartered in Hanover and employing approximately 67,000 people globally, saw a 1% rise in revenue to €4.9 billion (£4.3 billion) for the quarter ending in December. Operating profit increased by 7.5% to €72.9 million. Much of this success stemmed from its cruise business, where profits soared by more than 70%, according to Aarin Chiekrie, an analyst at Hargreaves Lansdown.
Chiekrie explained, "Consumers continue to prioritise travel, which has seen Tui’s occupancy rates rise despite its fleet expansion. All other business segments saw profitability improve over the period, except hotels and resorts, which suffered a double-digit decline due to losses resulting from the Jamaican hurricane and the non-repeat of some one-off benefits last year." Shares in Tui, listed in Frankfurt, edged up 0.4% in early trading on Tuesday, with the stock rising about 10% over the past year.
Future Outlook for Travel Industry
The travel industry is navigating a complex landscape where geopolitical factors and consumer preferences are rapidly evolving. Tui's experience underscores how immigration policies and border control perceptions can directly impact tourism flows. As European travellers increasingly opt for destinations like the Emirates, Asia, and the Caribbean, travel operators may need to adjust their offerings and marketing strategies to align with these shifting trends. The ongoing prioritisation of travel among consumers suggests resilience in the sector, but regional disparities in demand highlight the importance of adaptability in a volatile global environment.
