Britons remain keen to splash the cash on holidays in sunnier climes, buoyed by a mix of rock-bottom interest rates, low inflation and cheap petrol, the boss of Thomas Cook claimed yesterday.
“Our [UK] customers still want to go on holiday,” Peter Fankhauser, the tour operator’s chief executive, said. “And with low petrol pries and low inflation, they have more money in their pockets.”
However, Thomas Cook expects sales to Turkey to fall by almost 30 per cent this summer, after the terrorist attack in Istanbul last month led to a sharp drop in bookings. Turkey usually attracts around a fifth of Thomas Cook’s customers and the company has cut capacity accordingly, even though it said that there were already signs of bookings recovering.
Its rival Tui Group reported a 40 per cent fall in bookings to Turkey earlier this week and said tourists were shifting to Spain, the Canary Islands and Greece.
Thomas Cook said that geopolitical volatility was prompting increasing numbers of people to choose package holidays, because of the greater security they offer.
Customers have been switching from Turkey to Spain, Cyprus, Bulgaria and Greece, as well as to long-haul holidays in the US and Cuba. Demand for Spanish holidays is “boiling”, Mr Fankhauser noted.
Thomas Cook added that it had only seen a minor effect on bookings to the Caribbean following the outbreak of the Zika virus in Central and South America.
“In November I said that 2015 was one of the toughest years I have ever seen – and it has not got easier,” Mr Fankhauser said.
The world's 15 most powerful women in 2015
The world's 15 most powerful women in 2015
1/15 Angela Merkel - German Chancellor
German Chancellor Angela Merkel has retained her number one ranking for topping this year’s Forbes list for the fifth consecutive year and ten times in total.
2/15 Hillary Clinton - Presidential candidate, United States
Clinton, who could become the world’s most powerful leader in 2016, has been featured on the list every year since it launched in 2014.
3/15 Melinda Gates - Cochair, Bill & Melinda Gates Foundation
Melinda Gates has cemented her dominance in philanthropy and global development to the tune of $3.9 billion in giving in 2014 and more than $33 billion in grant payments since she founded the Bill & Melinda Gates Foundation with her husband in 2000.
4/15 Janet Yellen - Chair, Federal Reserve, Washington, United States
Janet Yellen made history in 2014 when she became the first female head of the Federal Reserve.
5/15 Marry Barra - CEO of General Motors
Mary Barra made history by becoming the first female CEO of General Motors.
6/15 Christina Lagarde - Managing director, International Monetary Fund
Christine Lagarde is entering the last year of her first term heading the International Monetary Fund (IMF), the organisation which serves as economic advisor and backstop for 188 countries. Under Lagarde the IMF has supported efforts to increase female labor force participation as way to reduce poverty and inequality. The UK, Germany, China, France and Korea have endorsed Christine Lagarde for another term as the head of the IMF.
7/15 Dilma Rousseff - President, Brazil
Dilma Rousseff, who has been elected in 2010, is Brazil's first female president.
8/15 Sheryl Sandberg - COO of Facebook
Sheryl Sandberg, Facebook COO and author of bestseller “Lean In,” joined the company in 2008 and became the first woman on its board four years later. Sandberg helped the social network go public and expand digital revenue.
9/15 Susan Wojcicki - CEO of Youtube
Susan Wojcicki is CEO of YouTube, the world’s most popular digital video platform used by over a billion people across the globe. She oversees YouTube's content and business operations, engineering, and product development.
10/15 Michelle Obama - First lady, United States
Michelle Obama, the 44th first lady of the United States has focused her attention on issues such as the support of military families, helping working women balance career and family and encouraging national service.
11/15 Park Geun-hye - President, South Korea
Park Geun-hye is the first female leader of a country that has the highest level of gender inequality in the developed world. In her inauguration speech, she promised to prioritise both national security and economic revitalisation.
12/15 Oprah Winfrey - Actress, Director/Producer, Entrepreneur, Personality, Philanthropist
Oprah Winfrey, a former queen of daytime TV has proven she can thrive without a talkshow. Her 'The Life You Want' tour sold out stadiums from Newark to Seattle in 2014.
13/15 Ginni Rometty - CEO of IBM
Ginni Rometty joined IBM in 1981 and later became the first woman to lead the company.
14/15 Meg Whitman - CEO of Hewlett-Packard
Meg Whitman is the only woman to have headed two large U.S. public companies: eBay and Hewlett-Packard.Until Marissa Mayer's arrival at Yahoo, she was the only female head of a leading Internet-based company.
15/15 Indra Nooyi - CEO of PepsiCo
Indra Nooyi is Chairman and Chief Executive Officer of PepsiCo. Mrs. Nooyi leads one of the world’s largest convenient food and beverage companies, with 2008 annual revenues of more than $43 billion.
The company has maintained its full-year guidance, from which analysts are expecting profits of around £350m.
Total bookings in the first quarter fell by 2 per cent year on year, while total revenue dropped 7.2 per cent to £1.4bn. However, the tour operator is confident that it can cope with the switch in demand to western European destinations because it began adding hotel capacity and flights in the autumn, when it became clear that there would be no holidays in Egypt or Tunisia in the wake of terrorist atrocities.
Thomas Cook said it would receive a £100m benefit from lower jet fuel costs, which it expects to pass on to customers because the market is so competitive. Its shares fell 1.8p to 94p.