Thomas Cook confident on turnaround strategy
Egyptian unrest sent Thomas Cook’s revenues sliding at the end of 2013, but chief executive Harriet Green has promised a bright summer as she continues to pilot the holiday group’s turnaround.
Halfway through a three-year plan to cut costs by £440 million through axeing jobs, shutting branches and selling off parts of its business, Egypt’s descent to the verge of civil war was blamed for Cook’s £15 million decline in revenues in the last three months of 2013.
Overall, however, despite fewer sales of winter breaks, the world’s oldest travel agent sold £9.3 billion worth of holidays last year, £200 million more than in 2012.
This summer, bookings are running at a similar level to last year, Green said. However, Brits might need to watch out for the sun loungers at European resorts this August: economically confident Germans are booking more breaks.
“German customers are spending more,” said Green. “Overall this summer, demand for Turkey is really strong, as are the Balearics, Greece and Canaries. There’s some return to Tunisia, and we’re seeing a real growth in demand for City breaks to the likes of Paris, Rome, Barcelona, Venice and Bruges.”
Wallet-conscious holidaymakers are opting for all-inclusive and self-catering deals, Green added, although long-haul breaks to Barbados and Cuba are also popular.
The UK’s wet weather is pushing up demand, the chief executive added. “Whether it’s short breaks booked from a damp cellar amid terrible flooding, or week-long vacation bookings, it’s symptomatic of the feeling of, ‘oh my goodness, this is too much, can we go away?’”
Cook also announced its latest disposal, selling Gold Medal, a long-haul scheduled flights, hotels and car-hire firm, to the Emirates Group for £45 million. That takes its total sell-offs to £125 million — already hitting Cook’s target of raising between £100 million and £150 million from sales by the end of next year.
Shares in Cook have more than doubled over the last year, but today slipped 2.5p to 182.9p.
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