TUI hit by £35m war cost as Middle East conflict disrupts travel demand

TUI Group has said the conflict in Iran cost it around €40 million (£34.8 million) in March, as the war forced large-scale evacuations and disrupted operations across key holiday destinations.

Europe’s largest travel operator said it had to repatriate thousands of passengers and staff following escalating instability in the Middle East and has now cut its profit outlook as a result.

The company warned investors that the conflict has created significant uncertainty for the sector, leading it to suspend revenue guidance and downgrade full-year earnings expectations.

TUI said it repatriated around 5,000 passengers from two cruise ships stationed in Abu Dhabi ports, with itineraries suspended until mid-May due to ongoing security concerns.

A further 5,000 holidaymakers were brought home from destinations including Cyprus, Turkey and Egypt, while around 1,500 staff members were also evacuated.

“The ongoing conflict in the Middle East and the uncertainty surrounding its duration continue to limit near-term visibility and drive consumer caution,” the company said.

The disruption has also coincided with a broader spike in oil prices, which has driven up jet fuel costs and added further pressure on airlines and travel operators across Europe.

TUI has now lowered its operating profit forecast for the year to between €1.1 billion and €1.4 billion, down from earlier expectations of €1.5 billion to €1.6 billion.

Shares in the group fell following the update, reflecting investor concerns over both near-term disruption and weakening demand patterns.

The company said it had seen a shift in customer demand away from eastern Mediterranean destinations towards more western European locations as travellers react to geopolitical uncertainty.

Despite the pressure, TUI insisted it remains financially strong and well-positioned to manage volatility, citing its balance sheet flexibility and ongoing strategic restructuring plans.

The update underscores the growing impact of tensions in the Middle East on the global travel industry, with airlines, cruise operators and tour groups all facing rising costs and disrupted schedules.