13 July 2018

TUI Group further expands its cruise fleet

In an interview TUI Group CEO Fritz Joussen talks about the promising market for cruises, the raising demand for holidays on the sea and about modern and sustainable ships.

Mr Joussen, TUI Cruises today announced the order of two new vessels. The TUI Group is thus further expanding its cruise fleet and growing even more strongly in this segment. Why cruises?

Cruises remain a future and growth market - also in the next decade. TUI and TUI Cruises are preparing for this. Germans and Europeans have only been discovering this form of travel for a couple of years. New target groups are emerging, families and younger people are also interested in travelling on the seas today. Cruises are a success story for TUI - this is clearly reflected in the consolidated results of the last five years. Today we are a developer, investor and operator of hotel and cruise companies, instead of the travel agents we were in the past. This makes TUI more profitable and we now earn our money more evenly over twelve months. In the previous fiscal year, the hotels and cruise lines contributed around 60 percent of our adjusted earnings. This shows that we are on a very good course.

What makes the cruise segment so interesting?

Cruises are booked throughout the whole year, which otherwise in the tourism industry is subject to the usual seasonality. The segment also has strong margins. The Mein Schiff fleet has its own high standard. Outside, the ship is mainly steel from the shipyard, inside it is designed by TUI Cruises. The design, the restaurants, the sports and wellness concepts, all this bears the signature of TUI Cruises. This creates the enormous differentiation for the guest and leads to extremely good utilization. We also expect strong demand in the coming years. More and more people are deciding to go on cruises. We are, therefore, consistently expanding, modernizing and rejuvenating the TUI Group's fleet portfolio. We will continue to operate one of the most modern and innovative fleets in the industry over the next decade.

Sustainability is a much discussed topic, especially for cruises. How can ships be operated sustainably?

The two other new vessels planned for delivery in 2024 and 2026 will be powered by low-emission liquid natural gas. This is a consistent continuation of our environmental strategy. TUI Cruises, however, already has one of the most modern and environmentally-friendly cruise fleets in the world: all existing cruise ships and those planned for commissioning until 2023 are characterized by their energy efficiency and consume about 30 percent less fuel than ships of comparable size. In addition, they are equipped with combined exhaust gas systems. This reduces sulphur emissions by up to 99 percent, nitrogen oxide emissions by up to 75 percent, and particulate emissions by up to 60 percent.

How will the TUI Group grow overall in the cruise segment over the next few years?

Next year, we will accelerate growth in the TUI Group's fleet portfolio: in 2019, TUI Cruises will launch the new Mein Schiff 2. Also in 2019, our Hamburg-based TUI subsidiary, Hapag-Lloyd Cruises, will be provided with two new luxury expedition vessels, the HANSEATIC nature and the HANSEATIC inspiration. In 2021, the commissioning of the HANSEATIC spirit will follow. The TUI Group has announced the construction of another vessel in 2023: TUI Cruises will see the addition of Mein Schiff 7 to their fleet. They will be followed in 2024 and 2026 by the newly ordered ships at TUI Cruises.