Thomas Cook

Strong bookings in Germany and Russia

Thomas Cook Group reduced its seasonal half-year loss and has double-digit growth in summer bookings thanks to high increases in Germany and Russia.

May 18, 2017
The Sentido Pearl Beach on Crete is benefiting from strong demand for Greece this year.
Photo: Sentido

Europe’s second-largest tourism group is performing well for summer 2017, with group bookings up by 12% and average prices 1% lower. Demand is strong for most destinations, especially Greece, Cyprus, Bulgaria and Croatia. In recent weeks Egypt has seen a significant increase in bookings, while demand for Turkey has also improved recently, with bookings now in line with this time last year. Following strong growth last year, bookings to the Spanish Islands have levelled off in a very competitive market.

Bookings in Continental Europe are up 15%, with good growth across all of the source markets. “We have seen particularly strong volume growth in Germany and Russia. Overall pricing is in line with last year, while margins are slightly below last year's levels. Having refocused its flying programme towards Greece and other short and long haul destinations, Condor's bookings have grown by 18%,” the group commented.

Thomas Cook reduced its operating loss for the half-year ending in March to £205 million from £232 million last year. Turnover was up by 12% to £3 billion, but this included the positive impact of the later Easter holiday this year in April this year. On a like-for-like basis, excluding this and other factors such as currency effects, revenues increased by 2.6%.

The Central Europe region (Germany and Austria) had flat revenues of £761 million in the October – March half-year and slightly lower underlying operating profits of £7 million.

“Our Central Europe business has successfully rebalanced capacity in response to changing customer demand, substituting alternative destinations to replace lower demand for Turkey. This has resulted in revenue being maintained at last year's levels. This strategy has enabled us to increase market share in a competitive market, despite margin pressures, enabling the business to report a result broadly in line with last year,” the group commented.

Condor’s half-year revenues dropped by 1.1% to £609 million and the seasonal loss deepened to £41 million from £22 million last year. Key factors were weak demand and capacity cuts to Turkey and market overcapacity and margin pressures to Spain.

CEO Peter Fankhauser commented: "Thomas Cook has delivered a good performance in the first six months. The progress we've made on our strategy helped achieve a 3 per cent increase in revenues, with strong customer demand for our holidays despite the competitive environment.

"Importantly, the actions we've taken to improve our holiday offering, managing our portfolio of hotels more tightly for quality, are delivering good results. Our customer satisfaction score increased by eight points compared with the same time last year. I am confident we can increase this further, with the roll out of our successful 24-hour hotel satisfaction promise to 80% of customers in our core sun & beach hotels this summer, and other exciting new initiatives in the pipeline.

"We've also made great progress in developing our own-brand hotels and resorts, which give our customers a unique Thomas Cook experience. We're planning 11 new hotel launches this summer including our new family-friendly Casa Cook in Kos, complete with its own beach club, and our first hotel in Sicily, the Sentido Acacia Marina. We also have a further 11 openings in the pipeline for the next 18 months, including at least two new Casa Cook hotels.”

Fankhauser added: "I'm also pleased with the progress we've made in our Group airlines business. Bookings are up significantly for the Summer, boosted by the addition of 15 new destinations to our flight programme, further expanding the choice and value we offer our customers. In our German airline, Condor, the actions we've taken after the market disruption of last year have started to come through, and we are confident that Condor will return to profit for the full year.”

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