Thomas Cook bookings down 5 per cent this summer
Weak demand for Turkey, and the Brussels terror attacks, have forced Thomas Cook to downgrade its profit forecast.
The travel giant, which released its third quarter results today, said it now expects its profit for the current financial year to be around £300 million.
In May it had forecast a full-year profit of between £310 million and £335 million.
Today it said summer 2016 bookings are down by 5% overall due to continued weak demand for Turkey.
But taking Turkey out of the equation, it said summer bookings would have been 8% up.
Cook reported strong growth to Spain and long-haul destinations, with the Canaries up 18%, Balearics up 11%, and US up 30%.
"Our financial result in the third quarter was in line with our expectations when we last reported in May, following the impact of the attack on Brussels airport in March and continued weak customer demand for Turkey, which has affected Airlines Germany in particular," said chief executive Peter Fankhauser.
"Since the half year, we’ve taken action to further reduce our capacity to Turkey and increased sales of holidays to other areas, including the Western Mediterranean and long-haul destinations such as the USA. Growth to smaller destinations such as Bulgaria and Cuba is also strong.
"We are operating in a challenging geopolitical environment, with repeated disruption in some of our key source and destination markets. In addition, while Brexit has had no noticeable impact on our bookings so far, it has added to a general sense of uncertainty – for our business and our customers alike.
"Against this backdrop, our focus is to give customers great quality holidays as part of a package that provides the reassurance that they will be cared for at all points, from booking their holiday through to their return home. Our all-inclusive holidays in particular enable customers to enjoy their holidays without worrying about unexpected costs."
Across the whole group, Thomas Cook’s summer 2016 programme is 81% sold, 3% below the same period last year.
In the UK, bookings are 1% lower than this time last year.
Package holiday pricing remains strong at 2% above last year, but overall UK average selling prices are down 4%.
Thomas Cook said this reflected the planned growth in its seat-only business, which has lower average selling prices than package holidays.
The 175-year-old tour operator saw revenues fall 8% in the third quarter to £1.85 billion, while pre-tax losses widened to £64 million.
Its share price has fallen more than 50% over the past year.
Bev
Editor in chief Bev Fearis has been a travel journalist for 25 years. She started her career at Travel Weekly, where she became deputy news editor, before joining Business Traveller as deputy editor and launching the magazine’s website. She has also written travel features, news and expert comment for the Guardian, Observer, Times, Telegraph, Boundless and other consumer titles and was named one of the top 50 UK travel journalists by the Press Gazette.
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