TUI summer bookings strengthen

Thomson Holidays owner TUI Travel reported improved summer bookings today as it continued to outpace the market and make gains at the expense of struggling rival Thomas Cook.

Europe’s biggest tour operator said cumulative bookings as at 25 March were 6 per cent lower, compared to a 7 per cent decline as at 29 January, driven by demand for differentiated products - that is, holidays exclusively available through TUI.

However, the company said weak demand for North African destinations, such as Tunisia and Egypt, following political turmoil in the region, continued to weigh on its overall performance.

Thomas Cook, which was forced to turn to its banks for additional support last year and has reduced its capacity, unveiled a worsening picture yesterday with a decline in summer bookings widening since its last trading update in February.

The battle between TUI Travel and its rival Thomas Cook has heated up since the latter revealed the extent of its difficulties last November, when it appealed for a £100 million lifeline from its lenders.

Thomas Cook rolled out a publicity drive after its troubles were exposed, with adverts in national newspapers reassuring customers that it was safe to book holidays despite fears of its collapse.

But TUI was quick to capitalise on its rival’s woes by publishing its own adverts saying: “Another holiday company may be experiencing turbulence, but we are in really great shape.”

TUI Travel said overall trading was in line with expectations, including an improvement in winter bookings, which with just a few weeks of the season remaining is now 90 per cent booked – higher than this time last year.

Peter Long, TUI Travel chief executive, said: “We are pleased with our Winter performance, particularly in the UK, where our focus on differentiated product and online distribution is resulting in us out-performing the market.

“Summer 2012 volumes have improved in all key markets since our last update. We are pleased with the development of bookings and pricing in the UK, where we continue to out-perform the market and have a strong performance in online sales.”

The group said 48 per cent of its summer programme was booked up, while the average selling price is currently 8 per cent higher.

TUI said it has continued to increase the proportion of holidays sold online with 40 per cent booked online for summer 2012, up five percentage points on last year.

Looking ahead, the group said its summer bookings were improving although it did see difficulties in its French market, which has been most severely hit by the downturn in demand for North African destinations.