Peterborough's Thomas Cook sees revenue slide in wake of terror attacks

Revenue at Peterborough-based holiday giant Thomas Cook has fallen following terror attacks at some of its key destinations.

Thursday, 28th July 2016, 10:32 am
Updated Thursday, 28th July 2016, 11:34 am
Thomas Cook Group's Peterborough base in Bretton.

The tour operator has blamed outrages in Turkey and Brussels for an eight per cent fall in revenue to £1,850 million for the three months to the end of June.

Underlying profit came in at £2 million - down from £30 million for the same period last year.

The company has also lowered its expectations for its full year underlying operating profit to £300 million - down from between £310 million to £335 million forecast in May.

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The 175-year-old company, which is the world’s oldest tour operator, says it has moved to offset the decline by increasing holiday packages on offer in Spain, the Western Mediterranean and long haul destinations such as the USA.

Peter Fankhauser, chief executive, said: “Our financial result in the third quarter was in line with our expectations when we last reported in May, following the impact of the attack on Brussels airport in March and continued weak customer demand for Turkey, which has affected Airlines Germany in particular.

“Since the half year, we’ve taken action to further reduce our capacity to Turkey and increased sales of holidays to other areas, including the Western Mediterranean and long-haul destinations such as the USA.

“Growth to smaller destinations such as Bulgaria and Cuba is also strong.

“We are operating in a challenging geopolitical environment, with repeated disruption in some of our key source and destination markets.”

Figure released by Thomas Cook show that bookings overall are down by five per cent due to continued weak demand for Turkey.

However, it has seen a growth in bookings to Spain and for long-haul.

Bookings to the Canaries are up 18 per cent, the Balearics up 11 per cent and bookings to the USA up 30 per cent.

The company says its summer 2016 programme is 81 per cent sold - three per cent below the same period last year.

Exclude Turkey and Thomas Cook’s holiday bookings figures have actually risen by eight per cent.

The share price for Thomas Cook, which employs 1,115 people at its offices in Bretton, had rallied this morning (Thursday) and was up 7.3 per cent to 64.40 pence per share. But that is still a long way short of its high of 130.11p.

At one point last month, its share price had plunged to 52.6p.

Mr Fankhauser also said there had not been any noticeable impact from last month’s EU referendum result.

But he added: “While Brexit has had no noticeable impact on our bookings so far, it has added to a general sense of uncertainty - for our business and our customers alike.

“Against this backdrop, our focus is to give customers great quality holidays as part of a package that provides the reassurance that they will be cared for at all points, from booking their holiday through to their return home.

“Our all-inclusive holidays in particular enable customers to enjoy their holidays without worrying about unexpected costs.

“Meanwhile, we continue to make good progress with our underlying strategy, with sales to our own-brand hotels up by seven per cent so far this year.

“Our Net Promoter Score - the metric we use to measure customer satisfaction - further improved across the Group, reflecting the actions we’ve taken to improve our customers’ holiday experience.

“We’ve seen a particularly strong performance in the 1,500 hotels where we’ve launched our 24-hour hotel satisfaction promise, with NPS so far 9 percentage points higher than in our other hotels.

“Overall, our improving operations and significantly stronger balance sheet give us the flexibility to navigate through the current market conditions.

“I am confident that our focus on strengthening our holiday offering, transforming our customer service, and bringing our businesses closer together, is laying strong foundations for future growth.”