The future for holidaymakers as seen by TUI and Thomas Cook

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Corfu – Greece is doing well according to Thomas Cook

Last week both Thomas Cook and TUI reported on their businesses and made some comments about the future. Those reports were created  before the demise of the Monarch Group this morning so they will be revising some of their thoughts now.

Thomas Cook was the first to report saying that bookings across the entire group were up 11% year on year with average selling prices up 1%. In the UK bookings were up by 8% for summer 2018 and charter risk package holiday bookings are up by 2%, while pricing is up by 7%.

They sold slightly more holidays at the time the report was compiled than they did for the same time last year so, all-in all, it suggests that the holiday market was buoyant. In particular they listed Greece, Bulgaria and Cyprus, together with long-haul destinations such as the USA as being strong and that bookings to Egypt and Turkey were continuing to rise.

Bookings to the UK and Ireland’s most popular destination, Spain were  “broadly in line with last year” which is an interesting comment given that many people opted for perceived safer destinations and Spain was certainly considered one of those. Does it suggest that Thomas Cook missed out on those extra bookings?  Yes, but because of the intensified competition they limited growth in Spain so that their profit margins wouldn’t be hit and expanded elsewhere.

…and both see an increase in bookings to Turkey

Overall group winter bookings were up 3%, supported mainly by a recovery in demand for Turkey and North Africa (by that I take to mean Egypt and Tunisia) with average selling prices up 2%. In the UK, winter bookings were up 5%, against a strong comparative period, with pricing up 3%. The obvious comment is that holidays are going to cost us more but compared with the decline of sterling against the euro it could have been a lot worse.

TUI on the other hand didn’t seem so bullish. It said that its winter bookings in the UK were down 7% year on year following zero growth this summer. It said demand for the Caribbean and Florida had been affected by Hurricane Irma, with several hotels closed for repairs. It did say that bookings for  Cape Verde, Cyprus, North Africa and Thailand were good suggesting that both Egypt and Tunisia will fare well this winter and next summer.

and cruises are doing well

Basically the company seems to be saying that it is trading at about the same level as it did last year.

Overall the TUI Group, including Thomson Cruises, saw a 9% increase in revenue for summer 2017 and revenue for this coming winter is also up 9% year-on-year meaning that they are managing to persuade us to part with more money than Thomas Cook is managing to do.

This morning in the offices of both companies, senior management will be looking at their forecasts in the light of what has happened to Monarch. Both have been approached by the administrators to buy parts of the Monarch Group as have other companies.

With Monarch’s the outlook for the remaining tour operators may have got a little bit rosier. For travellers and holidaymakers I suspect that it will get a little more expensive.

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