Troubles in Egypt and Tunisia and an unfavourable exchange rate are hitting Kuoni’s bookings for this year.
The Zurich-based company said booking volumes were 7% down in Swiss franc terms as of March 13, compared to this time last year.
In local currency terms group bookings are flat.
A regional breakdown of figures showed bookings in the UK and Benelux are down 13 %, or down 3% in local currency terms.
“Political turmoil, particularly in the North African tourist destinations of Egypt and Tunisia, led to a temporary suspension of all holidays to these countries in February 2011,†said CEO Peter Rothwell.
“Cancellations were only partially offset by rebookings, so booking volumes are down. However, our flexible business model allows us to adjust our offerings to other holiday regions. The sharp depreciation of the euro against the Swiss franc is also hurting bookings figures.
“Due to the slight weakening of economic growth in the main markets, the uncertain geopolitical situation in Arabic countries and the potential consequences of the severe earthquake in Japan, it is difficult to estimate what will happen in 2011.â€
Kuoni released the trading update as it unveiled its full-year results for 2010.
In 2010, operating profit for the UK and Benelux region was down by 10 million Swiss francs to CHF8.2 million.
Turnover was down to CHF595 million from CHF652.
Operating earnings (EBIT) fell to CHF8.2 million from the CHF9.2 million achieved in 2009. Underlying EBIT was CHF 16.1 million.
“The results were heavily influenced by specific external factors,†said the group’s statement.
“The flight cancellations caused by ash from the Icelandic volcano affected the UK and the Benelux countries more than most. In addition, weak consumer sentiment had a negative effect on demand in a still difficult economic environment. Sustainable cost savings had a positive influence on the operating result.â€
Overall, the Kuoni group saw underlying EBIT rise from CHF60.5 million to CHF127 million.
Turnover was up by 2.3% to almost CHF 4billion, while net profit climbed from CHF1.6 million to CHF23.2 million.
By Bev Fearis
