Published on Wednesday, July 17, 2013

It's bloody tough out there, says travel boss as shares slump in heatwave

Shares in travel companies have fallen due to fears that the UK heatwave will lead to a sharp drop in the number of people booking last-minute foreign holidays.

TUI Travel shares fell 4.5% yesterday before closing 2.9% down at 365.5p. However, Thomson said yesterday that its online package holiday sales were 7% up year on year last week, indicating strong growth despite the onset of the good weather.

Thomas Cook shares fell 3.1% but recovered slightly to end the day at 2.1% down, leaving shares resting at 142.6p. The company declined to say what impact the heatwave was having on its bookings, saying it never commented on trading, "particularly in closed periods".

Shares in budget airlines easyJet and Ryanair also fell, with easyJet losing 8p per share and Ryanair falling 12.8 cents.

Analyst Karl burns of stockbroker Panmure Gordon told the Daily Telegrah shares were sensitive to the late bookings market and investors are jittery that weak demand may force holiday firms to discount.

Steve Endacott, CEO of online travel agent On Holiday Group said yesterday that the industry had been wrong-footed by the hot weather, having anticipated a strong summer unaffected by major events such as the London Olympics, football tournaments, Royal weddings or the Queen's Diamond Jubilee celebrations.

In his latest blog, Endacott claimed online travel agents had seen a 20% drop in bookings, with business hit almost as hard as during the ash cloud crisis of 2010.

"It's bloody tough out there and a bit bloody depressing," he said.

Endacott said tour operators would be forced to start discounting if the hot weather continues into another week.


By Linsey McNeill

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