Holiday operators suffer setbacks
11th August 2010
The number of Britons searching for foreign travel money may be set to fall after news that Thomas Cook has issued a profit warning following poor sales of its holidays.
People staying at home due to financial concerns triggered the warning - the second from a major tour operator in as many days after TUI Travel revealed disappointing trading results.
Travel insurance providers will hope they are not hit by a similar lack of demand.
Thomas Cook described UK trading as being "softer than expected", with a 2% fall in bookings during the last four weeks. The company is also being forced to give away more holidays in the cheap 'lates' market.
Like TUI - whose recent bookings also dropped 2% - the operator blamed an "uncertain" climate, good weather and the World Cup for the trading pressures as well as disruption from Iceland's volcanic ash cloud.
Average prices are 3% higher but have not risen by as much as Thomas Cook previously hoped because of the weaker booking trends in May and June - leaving expected profits at the lower end of market hopes.
Thomas Cook chief executive Manny Fontenla-Novoa said he "always expected" a challenging year, as the group faced headwinds from a stronger pound diminishing its euro-based takings.
The tour operator cut its winter holidays, decided not to increase the amount of summer breaks it sells, and is pushing through rate reductions with hoteliers to cut costs.
Copyright © Press Association 2010
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