TUI Scraps Revenue Guidance After €40 Million Geopolitical Shockwave

The travel giant’s second-quarter performance showed genuine improvement, but the optimism evaporated almost as quickly as it appeared. TUI has slashed its full-year profit forecast and suspended its revenue targets entirely — an unusual double move that underscores just how dramatically the conflict in the Middle East has upended its operations.

Management now expects adjusted earnings before interest and taxes (EBIT) for the current fiscal year to land between €1.1 billion and €1.4 billion. That marks a sharp reversal from the original target of 7 to 10 percent growth over last year’s €1.41 billion, meaning the new range even allows for a year-on-year decline. The revenue outlook has been shelved until conditions stabilize.

A €40 Million March

The immediate trigger was March, when the escalating conflict generated roughly €40 million in direct costs. TUI was forced to repatriate approximately 10,000 guests and 1,500 crew members, while operational disruptions compounded the damage. Two of its cruise ships — Mein Schiff 4 and Mein Schiff 5 — remained stranded in Abu Dhabi and Doha harbors for weeks, with all Persian Gulf itineraries cancelled through mid-May. Both vessels finally exited the region on April 19 during a lull in hostilities and are now heading to the Mediterranean for their summer season.

The broader booking picture tells a similar story. In the crucial Markets & Airline segment, summer 2026 booked revenue trails last year by 7 percent. Demand has softened notably for Turkey, Cyprus and Egypt, though some of that slack is being absorbed by a shift toward western Mediterranean destinations. Hotel occupancy for the second half is also lagging. Beyond the geopolitical turmoil, TUI is still dealing with the aftermath of a Caribbean hurricane that disrupted operations in that region.

A Brighter Second Quarter

Against this troubled backdrop, the second quarter itself offered a glimmer of hope. TUI expects adjusted EBIT of between €5 million and €25 million for the period — a dramatic swing from the €207 million loss recorded a year earlier. The improvement reflects ongoing restructuring within the Markets & Airline division, which is beginning to show results.

Should investors sell immediately? Or is it worth buying TUI?

Fuel costs, at least, are not adding to the headache. The group has hedged 83 percent of its kerosene requirements for summer 2026, insulating it from further price volatility.

Analysts Hold Their Ground

Despite the downgrade, most sell-side analysts remain constructive. Morgan Stanley and Deutsche Bank Research both trimmed their price targets to €10.50 but maintained “Overweight” and “Buy” ratings respectively. JPMorgan kept its target at €13.50, describing the adjustments as unsurprising given the circumstances. Bernstein Research, meanwhile, sees the core issue as a shift in consumer behavior toward shorter booking lead times rather than a structural demand collapse; it left its price target unchanged at €9.20.

Market Reaction

Investors have been less forgiving. The stock traded at €6.70 on Thursday, down nearly 4 percent on the day and roughly 25 percent below its level at the start of the year. That puts the shares well below all major moving averages, reflecting the uncertainty that now hangs over the business.

TUI is expected to provide more clarity when it publishes its half-year results on May 13. Until then, the combination of a suspended revenue forecast, a wider-than-usual profit range, and a geopolitical situation that remains volatile leaves investors with little to anchor on.