Thomas Cook hails strong start to the year

Revenue at Thomas Cook was up 1% to £1,618 million during the first quarter of the year following growth in holidays to Greece, Spain and long-haul destinations.

Gross margin during the three months to the end of December rose 10 basis points to 22%, which the Group said reflected its focus on its own products and selected partner hotels. Average selling prices are up 2%.

Overall, the Group made an operating loss of £49 million, which was £1 million less than during the same quarter of the previous year.

Online bookings during the quarter were up more than 20% in the UK and 40% in Germany.

Thomas Cook also claimed its customers were happier after its ’24-hour satisfaction rating’ was extended to 250 hotels in long-haul destinations this winter. Its Net Promoter Score has risen eight points year on year.

The operator has sold 82% of its winter programme, which is in line with expectations, while summer is 31% sold, with bookings 9% ahead of this time last year.

It said its interest on loans had reduced following the recent €750 million bond refinancing. Chief executive Peter Fankhauser said: "We have delivered a solid performance for the first three months in line with our expectations, against a backdrop of continued uncertainty.

"Our businesses in the UK and Northern Europe continued last summer’s strong performance into the first quarter, while our tour operating business in Continental Europe also improved. This helped to offset the pressures that Condor is experiencing in the German airline market. We have taken measures to address Condor’s challenges and expect to start to see the benefits come through in the second half, as we set out in November.

"In preparation for the summer season, we have expanded our holiday offering to Greece and a number of smaller destinations across Europe, and I’m pleased that this early action is paying off."

Greece is now Thomas Cook’s biggest destination, having recovered from the refugee and financial crises, which pushed it into fifth position.

Strong demand for other destinations such as Cyprus, Bulgaria, Portugal and Croatia was making up for a lack of demand for Turkey, it said. 

"We have a number of exciting new customer initiatives coming this summer. These include the further roll- out of our successful 24-hour satisfaction promise to cover 80% of our customers, and the launch of a brand new mobile in-flight entertainment system," added Fankhauser.

"We are also making good progress on our own-brand hotel portfolio, with 10 new hotels set to open for the summer, including our second Casa Cook in Kos, enabling us to offer more unique holidays and further strengthening our growing hotels business.

"We remain cautious about the rest of the year, given the uncertain political and economic outlook. It’s still relatively early in the selling cycle for summer holidays, but based on current trading, and supported by further financial benefits from implementing our strategy, we expect our full year operating results to be in line with current market expectations."