Tourism giant says bookings recovering after security concerns

LONDON - Reuters

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Tourism group Thomas Cook said bookings were recovering after customers delayed making holiday plans following terror attacks in Paris last November and in Istanbul in January, which has caused demand for trips to Turkey to plunge.

Last year there were also terror attacks in Egypt and Tunisia, making tourists wary of those previously popular winter sun destinations, and Thomas Cook said it was offering more holidays in Spain, Cyprus, Bulgaria, the U.S. and Cuba as alternatives.

For the summer, when Thomas Cook makes all its profit, customer security worries had so far dented bookings, the company said, with its program 29 percent sold, 2 percentage points lower than where it stood at this time last year.

Shares in the company dipped 3 percent to 93 pence, slightly lagging a 2 percent fall in the British midcap index.

But the company said it was experiencing a later booking pattern and that demand for holidays overall was strong, and as such it would stick with its annual guidance provided that the recovery experienced in recent weeks was sustained.

Turkey had last year accounted for about a fifth of Thomas Cook’s business on a number of guests basis, but the company had cut its capacity in the country by 29 percent to account for the drop-off in demand following the death of 10 German tourists in after a suicide bomb in Germany’s biggest city on Jan. 12.

The firm’s bigger rival TUI Group on Feb. 9 reported a 40 percent drop in bookings to Turkey for this summer due to safety concerns and said it was investing in Cape Verde and Bulgaria as alternatives.

Thomas Cook said that in Europe people still wanted to go on holiday and with continued nervousness about travel due to heightened geopolitical uncertainty, they were more inclined to travel with a tour operator.
“The feedback out of customer research is that they feel safer in the hands of a package operator,” CEO Peter Fankhauser said.

The consensus forecast for Thomas Cook’s core earnings (EBIT) currently stands at 347 million pounds ($501 million) according to Reuters data, representing a 12 percent rise on last year’s result.

The company was only seeing a minor impact in terms of customers seeking to re-book away from the Caribbean as a result of the Zika outbreak in the Americas.