Thomas Cook says recovery in Turkey and Egypt bookings continues

LONDON

Britain’s Thomas Cook said a visible recovery continues in bookings for Turkey and Egypt, although it echoed concerns raised by rival tour operator TUI over the market for travel by British tourists on May 18, saying that competition at home had slowed growth, Reuters has reported. 

Although Thomas Cook said it was seeing strong demand across most of its markets, including a recovery in holiday bookings for Turkey and Egypt, growth in British demand for popular Spanish resorts had levelled off.

Tour operators raced to boost capacity in the western Mediterranean last year after security concerns hit travel to Egypt and Turkey. That makes last year’s growth spike tough to match as rivals have also boosted their Spanish capacity.

“We have a very competitive market environment from the U.K. to Spain,” Thomas Cook chief executive Peter Fankhauser said, adding that it was acting to support prices by focusing on higher margin hotels.

“We don’t have growth in Spain, but ... we are shifting capacity into Greece and Turkey and following customer demand,” he added. 

Unlike TUI, Thomas Cook was confident of a recovery in its Turkish and Egyptian markets, with Fankhauser saying bookings to Egypt had more than doubled, and that the recovery there and in Turkey was helping make up for flattening demand for the Spanish islands.

British bookings to the Spanish islands were slightly behind last year. Across Thomas Cook, bookings were up 12 percent year-on-year, while bookings from the U.K. were up just two percent.

Thomas Cook said trading was progressing as expected, and it would meet forecasts for full-year operating profit. This is expected to come in at 326 million pounds ($422 million), according to Thomson Reuters estimates.

The tour operator posted a loss in the first half, as is usual during its winter season. Thomas Cook said the period had ended in line with its expectations.

Its seasonal underlying operating loss improved by 2 million pounds to 177 million pounds in the six months to the end of March, and it posted a winter loss after tax of 272 million pounds.

Revenue rose 3 percent to 3 billion pounds, roughly in-line with a Thomson Reuters estimate, which the company said reflected strong winter demand to Spain and long-haul destinations.