Thomson and First Choice parent TUI Travel confident despite heatwave blow

 

Thomson and First Choice parent TUI Travel said the recent heatwave knocked UK sales growth, but insisted summer trading was strong thanks to growing consumer confidence.

Europe's biggest tour operator said UK sales rose 11%, boosted by a 4% increase in customer numbers and a 7% rise in prices - setting it on course to grow annual profits by at least 10%.

But with some Britons opting to holiday at home instead of travel abroad, it saw a slowdown on the 13% UK sales growth in May, when UK customer numbers were running 7% higher.

Chief executive Peter Long said consumer confidence is "clearly looking much more positive".

TUI said its UK summer sales were ahead of the market, with fuller planes, stronger margins and capacity up 4%. It has sold 86% of its summer programme in the UK, while summer sales across the group are 84% sold.

Mr Long said: "Only marginally, it's been slightly weaker than it was before this very nice weather. But fundamentally we are well sold.

"We don't believe customers are going to fundamentally change their holiday plans.

"Having nice weather reconfirms why you want to take your overseas holiday.

"I'm not going to make excuses of the weather because we are very happy with our current trading and where we want to be."

Its UK summer performance marks a sharp turnaround with this time a year ago, when customer numbers were down 5%, with only a steep increase in prices helping lift sales 4% higher.

TUI said it had also made an "encouraging start" to winter sales in the UK, with bookings up 1% and prices up 8%.

The group, which also owns Gulliver Travel and LateRooms.com, said operating profits for the three months to the end of June were up £13 million to £87 million.

Across the group, weak trading in France and Germany dragged overall customer numbers down 2%, but a 6% increase in prices helped lift total sales 4%.

TUI serves more than 30 million customers in around 31 markets and employs about 54,000 people.

PA

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