TUI buoyed by strong summer holiday demand

Thomson and First Choice holiday operator TUI Travel has seen improved demand for package holidays this summer, despite higher average prices.

The group said it had already sold more than a third of its UK summer holidays, with bookings 9 per cent ahead of last year as more customers opt for the certainty of all-inclusive deals and look to avoid a repeat of last year’s wash-out summer.

Chief executive Peter Long said: “Those customers who decided either to stay in the UK or book late and didn’t get what they wanted in terms of their preferred choice have contributed to strong demand for sales for winter and summer.”

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TUI reported an underlying operating loss of £116 million for the final three months of 2012, up from the £109m loss it posted a year earlier, but expects its full-year results will show a growth in operating profits of up to 10 per cent.

Meanwhile, price hikes at rival Thomas Cook pushed cumulative bookings down 5 per cent in the UK, as the group reduced its capacity and attempted to stem losses by managing its margins.

However, chief executive Harriet Green said turnaround plans at the UK’s second-biggest travel company were “firmly on track”, despite challenging global economic conditions.

Operating losses narrowed to £69.8 million in the three months to the end of December, 23 per cent lower than the £91.1m loss it reported for the same period a year earlier.