Tui Travel Share News (TT.)

Mon, 23rd Jan 2012 13:39

By Matt Scuffham

LONDON, Jan 23 (Reuters) - Thomas Cook's summer bookings by British customers were sharply lower in early January, further denting confidence in the embattled holiday operator after a string of profit warnings and a funding crunch.

The Financial Times reported on Monday that Thomas Cook's sales had fallen by 33 percent in the two weeks to Jan. 13, citing a leisure industry monitor shared by tour operators to track bookings.

Shares in Thomas Cook, which have fallen by over 90 percent in the last year, were down 3.3 percent at 14.5 pence at 1245 GMT. Shares in rival TUI Travel were down 0.8 percent at 195.2 pence.

In a statement emailed to Reuters, Thomas Cook confirmed that sales had fallen but said it was down to a planned cut in holidays on sale rather than a collapse of confidence in the brand.

Thomas Cook said it last reported UK bookings on Dec. 14, showing it went into January with an order book for summer 2012 that was well ahead of the wider market.

However, it also said at that time it had planned to cut the holidays for summer 2012 on sale in Britain by 8 percent given weak consumer sentiment.

'Therefore, we were expecting our intake plan to be well down in January (i.e. we would be managing bookings down towards capacity, focusing on margin rather than volume,' the world's oldest travel firm said on Monday.

The comparable period last year was also boosted by an intensive promotional campaign in shops and online.

Charles Stanley analyst Douglas McNeill said the latest figures were a concern, but investors should not read too much into a two-week booking period.

'It would be unwise to place too much emphasis on a snapshot of trading over a very short period of time. Nor does this data square very well with the notion that customers are fretting about Thomas Cook's solvency, given that its December bookings were relatively strong,' McNeill said.

Thomas Cook issued a string of profit warnings last year, leading to the departure of chief executive Manny Fontenla-Novoa in August. In November, it had to ask its lending banks to provide a 200 million pound debt facility to see it through the winter months when bookings are at their lowest.

The company has been hit by tough trading, especially in Britain, where its core customer base of families with young children is struggling in tough economic conditions. It has also been affected by unrest in popular destinations such as Egypt, Morocco and Tunisia.



(Reporting by Matt Scuffham; Editing by Will Waterman) Keywords: THOMAS COOK SALES/

(matthew.scuffham@thomsonreuters.com)(02075426734)(Reuters Messaging: matthew.scuffham.thomsonreuters.com@reuters.net)

COPYRIGHT
Copyright Thomson Reuters 2012. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.