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Cook profits to dip as heatwave hits lates market


Amie Keeley amie.keeley@travelweekly.co.uk


Thomas Cook has downgraded its full-year profit forecast following the UK heatwave, which has hit late bookings.


The company said the hot


weather in June and July had led to a “delay” in bookings that had cut profit margins in the lates market. It said it had about 20% capacity


left to sell, which was broadly in line with last year, but the last few weeks of trading had slowed. Chief executive Peter


Fankhauser said: “The prolonged heatwave means people have delayed decisions about their summer holidays. Across the market there are more holidays left for tour operators to sell in the lates period. This has put pressure on prices which, in turn, restricts our ability to drive margins. “As a result we now expect full-


year profit to be at the lower end of market expectations.” He said the World Cup had only a “minor” impact on late bookings. Fankhauser made the comments after Cook delivered its third-quarter results, which saw revenues increase 10% to £2.48 billion for the three months ending June 30, driven by demand for Turkey and North Africa. However, gross profit for the period was down 3% to £443 million, which the operator said reflected “continued margin pressure on Spanish holidays”. “While we have seen good


growth to higher-margin destinations such as Turkey and Egypt, this has not been enough to fully offset the margin pressure that has largely impacted holidays to Spain to date,” Fankhauser said. Cook reported a 12% increase


in new customers and 5% in repeat customers so far this year and a 20% growth in sales to its own-brand hotels.


August prices cut in bid to save lates


Juliet Dennis juliet.dennis@travelweekly.co.uk


Some operators are cutting August prices by more than 50% in a bid to revive the lates market hit by the UK heatwave.


Deals include Tui cutting a £576


self-catering week in Heraklion, Greece, to £204, and Thomas Cook offering £100 discounts on all August and September holidays. Discounts come as Thomas


Cook said its full-year profits were likely to be at the lower end of expectations as the heatwave dented late bookings. Operators including Sunvil and


Olympic Holidays have cut prices by more than 50% after an expected post-World Cup sales ‘bounce’ was quashed by the UK’s heatwave. Sunvil managing director Chris


Fankhauser blames the UK heatwave for ‘people delaying holiday decisions’


Wright said: “There are prices in the market for the next two weeks I’ve not seen before. “We are seeing people put off decisions to make the most of the UK weather, but there is strong demand for the end of August and September.” Balkan Holidays has reduced prices on late deals and, to drive


“We are seeing people put off decisions to make the most of the UK weather”


bookings, will hold four weekly draws to refund customers’ Bulgaria holidays in August – the first time it has given away holidays at this time of year. Sales and marketing manager


Chris Rand said: “We have charter flights that need to be filled. “This year has been much more of a challenge than last.” Alan Bowen, legal adviser to the Association of Atol Companies, said: “There are a lot of discounted holidays – this summer is not what people expected.” But other observers said discount levels were not excessive. Analysis of the lates period by comparison site Holiday Discount Centre showed mass-market prices down by an average 5%-10% from a month ago. Managing director Steve Campion stressed prices were “by and large” the same as this time last year, but prices earlier this year had been higher than last year.


2 August 2018 travelweekly.co.uk 5 3 STORIES HOT


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