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Renewed demand for Turkish holidays helps Thomas Cook offset Spanish pressures

A rejuvenation in Turkish holidays has helped Thomas Cook pare losses but high Spanish hotel prices continued to weigh on the tour operator.
Chief executive Peter Fankhauser said a staggering 80pc rise in demand from British holidaymakers for its Turkish holidays had pushed sales of those breaks back to levels seen in 2015, before terror attacks blighted the country’s tourism industry.
The steep price of holidays to Spain, where hoteliers had hiked room rates because of the previous shift in demand from Turkey and Egypt, led the company to reduce the number of seats it flies to the European country.
Mr Fankhauser said Spain remained its most popular destination but the combination of high hotel prices and a poor exchange rate for British holidaymakers - given the pound’s weakness against the euro - made the destination less appealing.
Renewed demand for Turkish holidays helps Thomas Cook offset Spanish pressures

A big rise in Spanish hotel room rates and the weak pound against the euro has continued to  pressure margins at Thomas Cook, its boss Peter Fankhauser said
“In the UK we are still feeling the margin pressure on Spanish holidays because prices rose about 10pc due to hotel costs and currency and we couldn’t pass all that on to customers,” he said.
Mr Fankhauser said the company had been quickly able to adapt to the rising demand for eastern Mediterranean destinations, which had helped it reduce losses in the six months to March 31 to ?303m from ?314m last year, on the back of sales of ?3.2bn compared to ?2.9bn for the prior period.
Average selling prices for the summer season fell by 2pc at group level year-on-year but Mr Fankhauser said this was caused entirely by a small drop in demand for long-haul flights in its seat-only airline business and disguised a 21pc rise in short and medium haul bookings, which are lower priced.
Thomas Cook
Shares in the company fell more than 2pc to 242p on the results but Mr Fankhauser said this was “really okay” given the 51pc rise in the stock in the past year.
Elsewhere, the company said it now has 189 own-brand hotels and had recently launched an investment fund with Swiss investment company LMEY in March with five seed assets valued at ?150m. Mr Fankhauser said another three hotels would be added to the fund shortly as it continued to work on improving its hotel estate. Thomas Cook removed 19 hotels in the period that it previously offered customers because it said they did not meet its standards.
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