After a rocky six months, Thomas Cook is expected to hit its trading forecasts, but the storm in Europe could still damage sales. In the latest trading update, the company said that 95 per cent of its winter holidays has now been sold, a one per cent increase from last year. Despite this, pressures in the Eurozone have driven down average prices by 2%.
According to Thomas Cook, summer 2015 holidays are now selling satisfactorily, with 54 per cent of them now sold- a 2% increase on this time last year. Spring showers drove customers to book a holiday in the sun, as bookings from the UK rose 4%.
In Europe, Germany is pulling up weaker sales despite being a pillar of economic strength, with bookings down 4 per cent on 2014. In order to reduce running costs, Thomas Cook has reduced its EU capacity. Online sales are still growing rapidly, a 10 per cent increase from last year owing to improved customer conversion rates on the website. Bookings made through a mobile or tablet device have increased by 63% to represent a third of total digital sales. Bookings for the new Thomas Cook’s Concept range of hotels are also up by 20 per cent.
Earlier in 2015, Thomas Cook began a partnership with Fosun, a Chinese company which owns Club Med, helping the company to expand into China.
Overall, Thomas Cook sales are in line with management expectations, but excessive airline capacity and competition from other travel companies will continue to put the business under pressure. Fluctuations in currency could also continue to damage profits.
The Thomas Cook Chief Executive said:
“Our bookings for the full year are developing well, especially in the UK and Germany. The tough trading competitions we reported previously in some markets are showing early signs of improvement. I am confident that, by continuing to implement our strategy we will further improve business performance.”
