Blue sky for Thomas Cook as summer bookings soar

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Holidaymakers have rushed to book holidays with Thomas Cook, with poor summer weather in northern Europe driving demand.

The tour operator has lost around 17 per cent of its market value over the past three months, but on Thursday its shares rose nearly 3 per cent to 119p as it said that 91 per cent of all its holidays for the summer season – which ends in October – were now booked. This figure rises to 95 per cent in the UK.

Demand for holidays among customers in northern Europe accelerated substantially in the second half of the year, spurred on by the recent poor weather in Scandinavia. Holidays there are now 99 per cent booked for destination such as Greece and Egypt, with average selling prices 4 per cent higher than last year.

Other tour operators and airlines, including EasyJet and Ryanair, have reported a similar rush to the sun.

But despite its upbeat report, Thomas Cook left its overall guidance for the full year unchanged from its update at the end of July. At that point it warned of a profits shortfall of £25m due to a weaker euro, the Greek crisis and the terrorist attack in Tunisia in which 30 British tourists were killed.

Peter Fankhauser, the chief executive, said: “Our trading performance for the summer season has progressed well, despite the impact of external shocks in certain destinations... With more than a third of the winter 2015-16 season sold, the bookings profile for next year is also encouraging.”

The urge to get away seems strong, with 39 per cent of winter holidays already sold. Bookings are ahead of last year in all of Thomas Cook’s main markets, it said, with prices also climbing.

The company reported a “significant increase” in bookings for Greece and Egypt as alternative “sun, sea and sand” destinations. Tunisia remains closed for business following the tragedy in June.

The popularity of the US and the Caribbean as summer destinations is also increasing, rewarding Thomas Cook’s recent expansion into more long-haul routes. In central Europe, however, the tour operator said it was facing tougher competition. 

Thomas Cook is also facing a £39m  currency hit this year because of the weaker euro and Swedish krona as it does not hedge profits made outside the UK. Its update came a day after Tui Group, Europe’s largest travel company, said trading remained robust.