Thomson hit by holidays slump

BRITAIN'S PACKAGE holiday industry was thrown into turmoil yesterday when the country's biggest travel company said demand for trips over the millennium period had dried up.

Thomson Travel shocked the market with the admission that UK demand for holidays in September and October had weakened and that it was cutting prices to sell millennium holidays, dashing hopes of a travel boom over the New Year.

Roger Burnell, Thomson's acting chief executive, said demand for millennium holidays started well last year but evaporated in the past six weeks. "Crazy prices" appear to be the main deterrent rather than fears that the Millennium computer bug might make flying more dangerous.

"Sales have deteriorated and are a long way off our initial expectations," he said. It is thought that Thomson has only sold 60 per cent of its Millennium packages.

As shares in travel companies plunged on the stock market, the Association of British Travel Agents confirmed that demand for mass market millennium breaks might be faltering though sales to more exotic locations had done well.

"If a travel company is selling holidays to destinations like Sydney, Rio de Janeiro, New York or Jerusalem, they would be OK. These places are flooded out with people who booked a long time ago, paid top prices and are happy to have done so," an ABTA spokesman said. "But sales to places like the Costa del Sol, Benidorm and the Canaries might have suffered."

Jeremy Skidmore, editor of Travel Weekly, said the market was "flat" but that Thomson's performance was even worse due to poor management.

Thomson's bombshell is the latest in a series of reports suggesting that the millennium might be a damp squib. Discount travel agents have been reporting the first signs of panic among airlines that may not fill all their seats at a time when profits are usually maximised.

A woman who had set up a baby-sitting service charging pounds 200 for the night said earlier this month that she had not received a single booking.

And pub group JD Wetherspoon confirmed yesterday that it would be closing its pubs at 8pm on New Year's Eve. It felt the additional wage costs for bar staff would not prove economic and its workers would probably prefer to have the evening off.

Thomson's profits warning is a severe blow for the army of private investors who bought shares in the company when it came to the stock market in May last year. It was one of the most popular flotations of recent years with investors lured by a 10 per cent discount on holidays for becoming members of its so-called "Founders club."

But the share price has been hit by two profits warnings in six weeks, the resignation of the group's chief executive and a disastrous threat of a price war in response to Airtours' attempt to buy rival holiday firm First Choice. The shares, 170p on flotation, fell 18 per cent yesterday to a new low of 103.5p.

Thomson, which reported interim losses of pounds 5m yesterday, is now planning a major overhaul of its business which includes the Britannia airline and Lunn Poly travel agents.

Start your day with The Independent, sign up for daily news emails
News
Ben Little, right, is a Labour supporter while Jonathan Rogers supports the Green Party
general election 2015
News
The 91st Hakone Ekiden Qualifier at Showa Kinen Park, Tokyo, 2014
news
Life and Style
Former helicopter pilot Major Tim Peake will become the first UK astronaut in space for over 20 years
food + drinkNothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
News
Kim Wilde began gardening in the 1990s when she moved to the countryside
peopleThe singer is leading an appeal for the charity Thrive, which uses the therapy of horticulture
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
Sport
Alexis Sanchez celebrates scoring a second for Arsenal against Reading
football
Life and Style
health
Voices
An easy-peel potato; Dave Hax has come up with an ingenious method in food preparation
voicesDave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
News
i100
News
Japan's population is projected to fall dramatically in the next 50 years (Wikimedia)
news
Life and Style
Buyers of secondhand cars are searching out shades last seen in cop show ‘The Sweeney’
motoringFlares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
  • Get to the point
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 General

Recruitment Genius: Project Implementation Executive

£18000 - £23000 per annum: Recruitment Genius: They work with major vehicle ma...

Recruitment Genius: Chiropractic Assistant

£16500 per annum: Recruitment Genius: A Chiropractic Assistant is needed in a ...

Recruitment Genius: Digital Account Executive - Midlands

£18000 - £26000 per annum: Recruitment Genius: They work with major vehicle ma...

Recruitment Genius: Web Developer

£28000 - £30000 per annum: Recruitment Genius: This company provides coaching ...

Day In a Page

NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders
Heston Blumenthal to cook up a spice odyssey for British astronaut manning the International Space Station

UK's Major Tum to blast off on a spice odyssey

Nothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
John Harrison's 'longitude' clock sets new record - 300 years on

‘Longitude’ clock sets new record - 300 years on

Greenwich horologists celebrate as it keeps to within a second of real time over a 100-day test
Fears in the US of being outgunned in the vital propaganda wars by Russia, China - and even Isis - have prompted a rethink on overseas broadcasters

Let the propaganda wars begin - again

'Accurate, objective, comprehensive': that was Voice of America's creed, but now its masters want it to promote US policy, reports Rupert Cornwell
Why Japan's incredible long-distance runners will never win the London Marathon

Japan's incredible long-distance runners

Every year, Japanese long-distance runners post some of the world's fastest times – yet, come next weekend, not a single elite competitor from the country will be at the London Marathon
Why does Tom Drury remain the greatest writer you've never heard of?

Tom Drury: The quiet American

His debut was considered one of the finest novels of the past 50 years, and he is every bit the equal of his contemporaries, Jonathan Franzen, Dave Eggers and David Foster Wallace
You should judge a person by how they peel a potato

You should judge a person by how they peel a potato

Dave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
Beige is back: The drab car colours of the 1970s are proving popular again

Beige to the future

Flares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
Bill Granger recipes: Our chef's dishes highlight the delicate essence of fresh cheeses

Bill Granger cooks with fresh cheeses

More delicate on the palate, milder, fresh cheeses can also be kinder to the waistline
Aston Villa vs Liverpool: 'This FA Cup run has been wonderful,' says veteran Shay Given

Shay Given: 'This FA Cup run has been wonderful'

The Villa keeper has been overlooked for a long time and has unhappy memories of the national stadium – but he is savouring his chance to play at Wembley
Timeless drama of Championship race in league of its own - Michael Calvin

Michael Calvin's Last Word

Timeless drama of Championship race in league of its own