MyTravel issues profit warning despite positive bookings

MyTravel has reported its best early bookings in five years for summer 2003, but warns profits will be below expectations.

The operator announced that UK bookings for summer 2003 are 34% ahead of bookings at this time last year, and 27% ahead of bookings in 2000. MyTravel has taken more than 46,000 passenger bookings for summer 2003.

MyTravel chief executive, Tim Byrne accredited the success to MyTravel’s policies of early booking discounts and transparent pricing. He said: “Our high profile summer 2003 marketing campaign to encourage early booking, and our move to ‘lowest price on the page’ brochure pricing, are part of our long-term objective to sell a greater proportion of holidays from the brochure, leaving fewer to sell in the lates market”.

Despite the positive bookings, Mr Byrne warned that profits for the year would be as much as £15 million below expectations. He claimed this is due to a recent change in accounting policy, whereby MyTravel would not take the profits made from selling insurance policies until after the holidaymaker has departed, instead of when the policy was sold. He added this would have a corresponding positive effect on next year’s profits.

Mr Byrne also said that bookings for winter 2002/2003 are 18% behind bookings at this time in 2001, because the company delayed the launch of the brochure until well after September 11. In Northern Europe bookings are 16% behind last year.

However, North America bookings for this winter are bucking the trend, at 21% ahead of last year. Mr Byrne told TravelMole why North America bookings were so positive. He said: “One of our Canadian businesses has benefitted considerably from the demise of Canada 3000, effectively taking the market share of our competitor”.

MyTravel announced today that it has sold its camping business, Eurosites, to Holidaybreakplc for £29.9 million, generating profits of £11 million.

Read our previous stories:
07-August-2002 MyTravel launches low fares airline
24-July-2002 MyTravel issues trading statement
22-July-2002 MyTravel appoints new European chief
12-July-2002 Airtours gambles on clearer brochure prices
24-June-2002 Ryanair’s Tim Jeans to join MyTravel
07-June-2002 EC “was wrong” to block Airtours/ First Choice merger
22-May-2002 MyTravel to launch ‘no-frills’ airline
30-April-2002 MyTravel to increase proportion of seat-only sales

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