Currency crisis and poor weather mean bluer skies for Tui Travel

The weaker euro and the miserable British summer stalled the decline in bookings with Thomson Holidays-owner Tui Travel as more people looked to escape to sunny destinations such as Spain.

Europe’s biggest tour operator said yesterday that overall summer bookings from the UK as of 29 July were 5 per cent down but this marked a “strong improvement” on the 6 per cent decline it reported in April.

Ibiza, Majorca and Menorca were among the most popular short-haul destinations, helped by the fall of the euro against the pound, which has made holidays to Europe more affordable.

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But the exchange rate will negatively impact on its profits in the current quarter – otherwise the firm would have exceeded market expectations.

Underlying profits fell 16 per cent to £74 million in the three months to the end of June. Sales fell 2 per cent to £3.7 billion, as the group was hit by the earlier Easter this year and the poor performance of its French business.

It also warned that fuel prices, which account for about 10 per cent of its costs, are set to continue rising next year although it has hedged some 60 per cent of those for next summer.

Tui said the summer season had proved “very encouraging” and it has 12 per cent fewer holidays left to sell than last year, after reducing capacity by 6 per cent.

It claims to have won a bigger share of the UK holiday market, helped by strong demand for exclusive products such as Thomson Sensatori resorts, which are aimed at the high end of the market, and Thomson Couples.

Its sports division had been boosted by sales of packages and tickets to the Olympics.

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