Thomas Cook's summer bookings increase with strong demand for Europe

Thomas Cook’s winter programme is closing out as expected although it is seeing some margin pressure in parts of the business due to increased competition.

The travel agent is progressing in line with expectations, it said in a half-year trading statement, with summer bookings increased on the back of strong demand for Greek holidays and smaller European destinations.

The winter 2016/17 programme is 90% sold as expected and bookings up 1% compared to last year, with average selling prices down 1%.

Holiday bookings were mainly due Spain, particularly the Canaries, and to certain long haul destinations such as the Dominican Republic, which offset softer demand for Turkey.

The FTSE 250 company expanded its winter sun programme for the UK business, which resulted in a 6% rise in bookings up 6% with pricing down 1%.

In Continental Europe, pricing was up 2% while bookings were 2% lower due to weaker demand for Turkey than last year, while for Northern Europe, bookings were slightly below last year and pricing was down 3%.

The Condor business’ load factor improved with bookings down 2% compared to capacity reductions of 5%, while pricing is up 1%.

Meanwhile, this summer is 42% sold, 1% ahead of last year and bookings are up 10% compared to a weak comparable period last year when sales were disrupted by a series of geopolitical events.

There was particularly strong demand for Greece and smaller European destinations including Cyprus, Bulgaria, Croatia and Portugal.

Bookings for Northern Europe are up 11% and average prices up 2%, due to demand for its own-brand hotels, while bookings for Continental Europe are also significantly higher, with double digit growth in most markets, although margins are slightly below last year's levels.

The company said that Condor’s pricing across short and long-haul destinations remains weak, as anticipated, with average selling prices down 6%.

In the UK, due to increased competition with the Spanish Islands the company has focused on selling higher margin, quality holidays rather than pursuing volume growth. The charter risk pricing is up 9%, while bookings are slightly behind last year.

For the UK as a whole bookings are flat and average selling prices are up 3%.

Chief executive Peter Fankhauser: “Following strong growth last year, bookings to the Spanish Islands have levelled off in a very competitive market. Competition is particularly intense in the airline sector, putting downward pressure on pricing.

"As we look ahead to the rest of the year, I am confident that the work we're doing to strengthen the quality and appeal of our holiday offering will win more fans for Thomas Cook, demonstrating continued progress in our transformation to put our customers at the heart of the business."