TUI’s Cruise Arm Sails Ahead as Summer Bookings Sink the Parent

S&P upgrades TUI Cruises outlook to positive amid capacity expansion, while parent TUI cuts profit forecast and shares drop 11% on Middle East crisis and rising oil prices.

The TUI Group is navigating sharply contrasting currents. While the parent company slashed its full-year profit forecast and watched its shares slide to €6.42 — down 11% in a single week — its cruise subsidiary just received a vote of confidence from S&P Global Ratings. The rating agency upgraded its outlook for TUI Cruises from “stable” to “positive” on April 27, while affirming the long-term rating at ‘BB-’.

The divergence underscores a tale of two businesses. On one side, TUI Cruises is riding a wave of capacity expansion, anchored by the June 2026 delivery of the “Mein Schiff Flow.” S&P expects the new vessel to boost capacity by 7%, more than compensating for the delayed return of the “Mein Schiff 4” and “Mein Schiff 5” to the Mediterranean following the Middle East crisis. The cruise line plans to operate its full fleet during peak season, with details of the maiden voyage released on April 28.

S&P projects TUI Cruises will generate €2.85 billion in revenue for the current fiscal year 2026, with EBITDA climbing to roughly €1.018 billion from €977 million a year earlier. The subsidiary has also locked in fuel and currency hedges through 2027, providing a buffer against external shocks that have rattled the parent.

The contrast with the broader group could hardly be starker. TUI now expects adjusted EBIT for fiscal 2026 to land between €1.1 billion and €1.4 billion — a sharp downgrade from earlier guidance that promised clear growth. The company pulled its revenue forecast entirely, citing the Iran conflict and rising oil prices. The summer booking season tells the story: booked revenues for the upcoming season are running 7% below last year’s levels.

The Middle East crisis has hit hard. TUI spent €40 million in March alone evacuating thousands of guests from the conflict zone. Travelers are shunning destinations like Turkey, Cyprus and Egypt, shifting instead to the western Mediterranean. The trend toward last-minute bookings is compounding the planning challenge for management.

Analysts have responded with caution. Barclays cut its price target for TUI shares to €9 but maintained an “overweight” rating, arguing the geopolitical headwinds are temporary. The bank noted that second-quarter results actually beat expectations, with TUI guiding for an operating profit of up to €25 million — a dramatic improvement from the loss posted a year earlier.

The market remains unconvinced. TUI’s stock now trades roughly 33% below its January high and has shed nearly 30% since the start of the year. Investors are waiting for the detailed half-year report due on May 13, which will provide concrete data on the current booking situation. A weak update for the crucial summer season could put even the newly lowered targets under pressure.

For TUI Cruises, the path to an actual rating upgrade over the next 12 months hinges on two factors: how smoothly the “Mein Schiff Flow” integrates into operations, and whether cruise demand holds up. For the parent, the question is whether the summer slump proves temporary or signals a deeper shift in travel patterns.