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Thomas Cook says holidays to the UK and Northern Europe have increased

Article By: ,  Financial Analyst
September 25, 2015 3:36 PM

Following the terrorist attack on a Tunisian beach earlier this year, Thomas Cook predicted a significant drop in revenue for the year.

However, the holiday operator has reported that it is doing well, despite one of its key destinations being effectively off limits for tourists. Tunisia's beach resorts have seen visitors drop by more than one million since the tragic events in July.

Thomas Cook says that sun-seekers are heading to destinations like Greece and Egypt instead of Tunisia, and the firm has seen a boost in sales to holiday destinations like the UK and northern Europe.

It said its turnaround programme was doing well and that the next stage was to provide a "higher quality and more focused holiday offering".

Summer capacity in the UK was 95 per cent booked, up one per cent compared to the same period last year. In addition, northern European holidays were 99 per cent booked, with prices for the region up by four per cent.

The group has also worked on expanding its long-haul routes, and has seen sales rise for holidays to the US and Caribbean. Its Airlines Germany business sold 89 per cent of its summer capacity. Bookings for that part of the business were were up seven per cent and prices were up one per cent.

Increased competition

Thomas Cook warned, however, that it was facing higher competition in central Europe, and this has led to a one per cent drop in prices for the region. Booking levels were also flat compared to the same period last year, with 90 per cent of capacity sold.

In addition, the firm says it expects a £39 million hit from the falling value of the euro – profits from the Eurozone will not be as strong when converted into sterling.

Chief executive Peter Fankhauser said: "Our trading performance for the summer season has progressed well, despite the impact of external shocks in certain destination markets, as previously announced."

He noted that more than one-third of the winter 2015/16 season was already sold and that the bookings profile for next year was also "encouraging".

Mr Fankhauser explained there had been "excellent progress" in transforming the business over the last three years. "We have developed a strong core holiday proposition based around our own-brand hotels, reduced our cost base and strengthened our capital structure," he said.

On Friday morning (September 25th), shares in Thomas Cook group were up 0.50 per cent to 119.60.

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