Thomas Cook issued a trading update today which revealed a “fragile consumer sentiment” amongst Brits which was slowing demand for holidays.
Speaking before entering a closed period after which interim results will be announced in May, chief executive Manny Fontenla-Novoa said there was strong growth in Germany and Northern Europe but the outlook was gloomier here in the UK where summer bookings were only up by 1% for 2011 compared to 2010.
He said: “Summer holiday bookings are ahead of last year across most segments, with particularly strong growth in our German tour operator and airline, as well as in Northern Europe. It is a weaker picture in the UK where recent trading has also been affected by fragile consumer sentiment. In response, we have taken a more prudent approach to capacity.”
Cook has cut capacity to last year’s levels in response to a Britain that is still tightening its purse strings in reaction to public spending cuts and austerity measures.
The operator says as a result, the summer 2011 programme is now 55% booked and average selling prices are up 4% which reflects a leaning towards all-inclusive products.
Fontenla-Novoa also revealed that the unrest in Egypt and Tunisia had cost the company £20 million – £5 million on repatriation and £15 million on lost margin.
He said bookings and capacity across all markets for the winter 2010 holiday season were lower than anticipated thanks to the effect of the protests.
But he remained upbeat, saying: “Overall, the business is performing well, given the disruption caused by the unrest in Egypt and Tunisia.”
Cook suffered 150,000 cancellations as a result of the unrest – 110,000 for Egypt and 40,000 for Tunisia. It estimates that this will mean the programmes to the destinations will only operate at about 70% of the level originally planned.
by Dinah Hatch
