Thomas Cook holiday demand falls as wary customers delay booking

LONDON – Reuters

DHA photo

British holiday company Thomas Cook said customers were delaying booking holidays, uncertain of making plans as they see previously popular destinations such as Turkey as less safe.

Thomas Cook said bookings for the summer period, when it makes all its profit, were 5 percent lower than last year as customers organised their trips later, continuing a pattern it highlighted in February.

Shares in Europe’s second largest holiday company fell as much as 7 percent to reach their lowest level for three years, on a day when all travel stocks fell on news of two explosions in Brussels. They were down 5 percent at 87.50 pence at 09:28 (GMT). 

Thomas Cook said prices were holding up, with those for package holidays from Britain up 4 percent. But the overall trend was for a later booking pattern, which it blamed on security concerns following a series of attacks in holiday destinations.

An attack on tourists in Istanbul in January caused demand for trips to Turkey to plunge, while last year there were also attacks in Paris, Egypt and Tunisia, making some tourists wary of previously popular destinations.

More customers were opting to holiday in mainland Spain and the Canary and Balearic Islands, as ell as the United States and Cuba. Fewer wanted to go to Turkey, the company said.

But the company stuck to its forecast for profit to grow, as long as bookings recover.

“This is dependent on seeing a sustained recovery in customer confidence as we progress through the summer season,” the company said on March 22.

Analysts expect Thomas Cook’s core earnings before interest and tax (EBIT) to come in at about 345 million pounds ($492.63 million), according to Reuters data, 11 percent higher than last year.

Numis analyst Wyn Ellis, who rates the stock a ‘hold’, said that Turkey was usually a popular destination for German holidaymakers. On a sales basis, Germany is Thomas Cook’s second biggest market behind the UK and Ireland.

“Whereas people would normally be booking their holidays and are comfortable in what they’re doing. Now they are holding back and thinking what are we going to do? Where are we going to go? “ he asked.