Winter bookings down at TUI Travel

 

Britain's biggest holiday firm TUI Travel outperformed its rival Thomas Cook today but warned winter bookings in the UK had slowed down in the face of weak consumer sentiment.

The Thomson Holidays and First Choice owner reported a 12% year-on-year drop in winter 2011/12 bookings as at November 27, compared to an 11% decline at its last update on September 11, as capacity - hit by turmoil in Egypt and Tunisia - was reduced 9%.

But the recent weak trade followed a record full-year performance as higher margin holidays helped drive a 15% increase in underlying operating profits in the UK to £147 million and an 18% rise in group profits to £471 million in the year to September 30.

TUI said sales of differentiated products - concept holidays unique to TUI brands - such as water park SplashWorld, Holiday Village resorts and child-free Couples holidays, grew 14% in the UK in the year to September 30.

The robust performance comes shortly after Thomas Cook spooked holidaymakers and investors when it turned to its banks for extra support in the wake of deteriorating sales.

Shares in TUI were more than 2% higher following the full-year results.

TUI said it was experiencing a later booking profile, reflecting the continuing issues in North Africa and the consumer spending squeeze, driven by higher prices and muted wage growth.

TUI said capacity in the UK had reduced as it moved aircraft within the group to serve higher demand in its markets in Canada and Scandinavia.

The group, which serves around 30 million customers and operates in 180 countries, said average selling prices are up 5%, reflecting cost inflation of around 4% but also the higher proportion of differentiated products, which are up 12% in current trading.

Peter Long, TUI chief executive, said: "We are very pleased with our robust performance in 2011 and have delivered another year of profit growth, against a backdrop of unrest in key North African destinations and weak consumer sentiment in some source markets."

Looking ahead, TUI said it was early in the booking cycle for summer 2012 as most of its markets launch their main edition brochures in December.

But so far it has sold 19% of the season's programme, with bookings 11% lower than the year before, partly reflecting the reduction in capacity, while average selling prices are up 9%.

There was some cheer for shareholders as TUI unveiled a 2.6% increase in its final dividend to 8p a share, bringing the full year dividend to 11.3p.

Thomas Cook secured an additional £200 million in funding headroom last month after it revealed sales had deteriorated as a result of low consumer confidence and the unrest in North Africa.

TUI took out a series of adverts in print and online shortly after Thomas Cook revealed the issues, which sparked criticism because it drew consumers' attention to Thomas Cook's financial problems.

The adverts read: "Unlike a certain holiday company we could mention, you don't need to worry about the way we run our business."

But Mr Long said the adverts were designed to "clarify" the difference between the two companies and said it was hard to determine what effect the issues at Thomas Cook were having on TUI's business.

Mr Long said the unrest in Cairo and the snow this time last year blurred the performance in the last two weeks.

"If Thomas Cook lose volume, we are the natural beneficiary," Mr Long said.

He added that sales had improved in the last two weeks but this could not be solely attributed to the problems at Thomas Cook.

TUI is currently expected to deliver underlying operating profits of £485 million to £490 million for next year but brokers at Numis Securities have forecast £608 million in the wake of Thomas Cook's woes.

Wyn Ellis, analyst at Numis, said: "We believe that TUI management will know exactly how to capitalise on Thomas Cook's problems."

He added: "It is too early to predict with accuracy the impact of Thomas Cook's recent poor publicity but we believe it will be very positive for TUI."

PA

Travel
travel
News
Tim Vine has won the funniest joke award at the Edinburgh Festival 2014
peopleTim Vine, winner of the Funniest Joke of the Fringe award, has nigh-on 200 in his act. So how are they conceived?
Sport
sportBesiktas 0 Arsenal 0: Champions League qualifying first-leg match ends in stalemate in Istanbul
News
Jamie and Emily Pharro discovering their friend's prank
video
PROMOTED VIDEO
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Sport
Manchester United are believed to have made a £15m bid for Marcos Rojo
sportWinger Nani returns to Lisbon for a season-long loan as part of deal
News
news
News
i100
Arts and Entertainment
O'Toole as Cornelius Gallus in ‘Katherine of Alexandria’
filmSadly though, the Lawrence of Arabia star is not around to lend his own critique
Life and Style
fashion
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Business Anaylst

£60000 - £75000 per annum + BONUS + BENEFITS: Harrington Starr: Business Anal...

Senior Project Manager

£60000 - £90000 per annum + Bonus: Harrington Starr: Global leading Energy Tra...

Associate CXL Consultant

£40000 - £60000 per annum + BONUS + BENEFITS: Harrington Starr: CXL, Triple Po...

Oil & Energy Business Anaylst

£45000 - £75000 per annum + BONUS + BENEFITS: Harrington Starr: Harrington Sta...

Day In a Page

Ferguson: In the heartlands of America, a descent into madness

A descent into madness in America's heartlands

David Usborne arrived in Ferguson, Missouri to be greeted by a scene more redolent of Gaza and Afghanistan
BBC’s filming of raid at Sir Cliff’s home ‘may be result of corruption’

BBC faces corruption allegation over its Sir Cliff police raid coverage

Reporter’s relationship with police under scrutiny as DG is summoned by MPs to explain extensive live broadcast of swoop on singer’s home
Lauded therapist Harley Mille still in limbo as battle to stay in Britain drags on

Lauded therapist still in limbo as battle to stay in Britain drags on

Australian Harley Miller is as frustrated by court delays as she is with the idiosyncrasies of immigration law
Lewis Fry Richardson's weather forecasts changed the world. But could his predictions of war do the same?

Lewis Fry Richardson's weather forecasts changed the world...

But could his predictions of war do the same?
Kate Bush asks fans not to take photos at her London gigs: 'I want to have contact with the audience, not iPhones'

'I want to have contact with the audience, not iPhones'

Kate Bush asks fans not to take photos at her London gigs
Under-35s have rated gardening in their top five favourite leisure activities, but why?

Young at hort

Under-35s have rated gardening in their top five favourite leisure activities. But why are so many people are swapping sweaty clubs for leafy shrubs?
Tim Vine, winner of the Funniest Joke of the Fringe award: 'making a quip as funny as possible is an art'

Beyond a joke

Tim Vine, winner of the Funniest Joke of the Fringe award, has nigh-on 200 in his act. So how are they conceived?
The late Peter O'Toole shines in 'Katherine of Alexandria' despite illness

The late Peter O'Toole shines in 'Katherine of Alexandria' despite illness

Sadly though, the Lawrence of Arabia star is not around to lend his own critique
Wicken Fen in Cambridgeshire: The joy of camping in a wetland nature reserve and sleeping under the stars

A wild night out

Wicken Fen in Cambridgeshire offers a rare chance to camp in a wetland nature reserve
Comic Sans for Cancer exhibition: It’s the font that’s openly ridiculed for its jaunty style, but figures of fun have their fans

Comic Sans for Cancer exhibition

It’s the font that’s openly ridiculed for its jaunty style, but figures of fun have their fans
Besiktas vs Arsenal: Five things we learnt from the Champions League first-leg tie

Besiktas vs Arsenal

Five things we learnt from the Champions League first-leg tie
Rory McIlroy a smash hit on the US talk show circuit

Rory McIlroy a smash hit on the US talk show circuit

As the Northern Irishman prepares for the Barclays, he finds time to appear on TV in the States, where he’s now such a global superstar that he needs no introduction
Boy racer Max Verstappen stays relaxed over step up to Formula One

Boy racer Max Verstappen stays relaxed over step up to F1

The 16-year-old will become the sport’s youngest-ever driver when he makes his debut for Toro Rosso next season
Fear brings the enemies of Isis together at last

Fear brings the enemies of Isis together at last

But belated attempts to unite will be to no avail if the Sunni caliphate remains strong in Syria, says Patrick Cockburn
Charlie Gilmour: 'I wondered if I would end up killing myself in jail'

Charlie Gilmour: 'I wondered if I'd end up killing myself in jail'

Following last week's report on prison suicides, the former inmate asks how much progress we have made in the 50 years since the abolition of capital punishment