Holiday sales down 10% at Thomas Cook

Thomas Cook, the travel agent jointly owned by Lufthansa and KarstadtQuelle of Germany, lost £250m in the first half of the year and said yesterday that bookings are still running 10 per cent below this time a year ago.

Karstadt's interim results yesterday were much worse than analysts had feared, in part because of falling demand at the travel agent chain. Thomas Cook accounted for most of the retail conglomerate's €212m (£135m) losses. Thomas Cook's UK arm lost £120m.

The travel agent said bookings had improved in the past few weeks, but were still down "a two-digit percentage figure" year-on-year, according to a spokesman. The company was giving analysts no guidance on the likely outcome for the year as a whole, but insisted that it makes most of its sales in the second half.

Sliding consumer confidence in Europe and a sluggish economy in Germany were blamed by Karstadt for its poor results, where losses were more than 50 per cent greater than the Frankfurt market had expected. The group also owns mail order businesses and department stores, where sales were down 11 per cent and where the company has laid off 7,700 staff in the last six months. The company said: "Although it is to be assumed that consumer demand will once more improve, the uncertain situation in the economy as a whole means that it cannot yet be foreseen whether this will happen during the current financial year or not until 2003."

Europe's biggest tour operators have all warned that sales will fall this year as customers stay closer to home, in part because of the impact of 11 September. MyTravel said last month that its bookings were 5 per cent down on a year ago.