TUI Travel, owner of Thomson, benefits as northern Europeans opt for fixed-price ‘sunny’ foreign holidays
TUI Travel, the world’s biggest tour operator, said summer holiday bookings had increased in number as rain-soaked northern Europeans sought out the sun but kept tight control of their budgets and turned to package deals.
The group, which owns Thomson and First Choice, on Thursday said it had sold about 86% of its summer holidays by the end of June, and that it had fewer holidays left to sell compared with the same time last year.
The wet weather offset weaker demand for holidays in Greece, Peter Long, the company’s chief executive, told reporters.
He said: “Northern Europe has been pretty consistently bad from a weather perspective over the last couple of months and that has benefited us with people deciding to book.”
The British budget airline easyJet last month said quarterly sales were boosted by sun-starved Britons fleeing unusually soggy weather, with bookings to Malaga and Alicante, as well as to Faro, in Portugal, up by a fifth during those periods of wet weather.
Travel firms and airlines across Europe reported bookings falling in recent months, affected by the eurozone crisis and uncertainty in Greece, a leading holiday destination.
TUI believed consumers were willing to loosen their purse strings for a get-away but increasingly looking for a holiday at a fixed price where they did not need to worry about how much they were spending.”Many of the differentiated holidays we offer are driven by the all-inclusive offering which has proved to be very popular in this economic climate,” said Long.
TUI Travel said underlying operating profit fell 16% to £74m ($115.9m) in the three months to the end of June, primarily because the Easter holidays fell during its second quarter, as opposed to the third quarter in 2011.
Group revenues fell 2% to £3.69bn, while operating margin dropped 0.3 points to 2%.
The FTSE 100 company said the UK, Germany and the Nordic region had all delivered solid growth during the period but that its French business continued to under-perform because of a slower than expected recovery in North African markets.
TUI said winter 2012/13 sales started well and that it was confident of meeting full-year earnings expectations.Recent results from hoteliers such as InterContinental, Marriott and Starwood have shown signs of a steady industry recovery despite some weakness in southern European nations and some slower growth in China.
Thomas Cook, which recently secured a three-year funding lifeline, last week reported a steep third-quarter loss despite a lift in foreign bookings from Britons exasperated with the rainy weather at home.