Thomas Cook’s UK holidaymakers are booking shorter than usual summer getaways, adversely affecting the tour operators’ selling prices for the “high” season. In a trading update, the travel company said the summer season was half-sold in all its markets – slightly ahead of the position this time last year – and that total bookings were 2 per cent higher. In the UK, bookings were 3 per cent higher. However, Thomas Cook explained that average selling prices were 2 per cent down, “due mainly to product mix and a higher proportion of shorter duration holidays reflecting customer demand”. It said it was attempting to offset the lower prices with new products and cost savings to improve profits. Across all of Thomas Cook’s markets, average selling prices were flat. On Wednesday, rival tour operator Tui Travel, Europe’s biggest, said its average selling prices were up 2 per cent. Harriet Green, Thomas Cook chief executive, described customer bookings as showing “an improving trend” since the first-quarter results. “Compared with last year, margins are expected to improve more than average selling prices, reflecting enhanced yield management and the benefits of our cost out and profit improvement programme, which is delivering ahead of schedule,” she said. Thomas Cook’s share price reacted positively on Thursday, rising by around 3.5 per cent. The shares have been on a steady upward climb as the group’s three-year turnround strategy, following its near-collapse in 2011, unfolds. The strategy involves disposing of businesses, cutting net debt, launching new products and cutting costs. Leisure analyst Mark Brumby of Langton Capital said: “Thomas Cook has survived its near-death experience and, whilst it has not yet prospered, it should be in a position to do so in 2014 and beyond. “That said, today’s statement does have a few cautious strands running through it and the remainder of the group’s recovery will be hard-fought.” The winter season is now 93 per cent sold, with average selling prices 1 per cent higher than at the same stage in 2013. But the impact of unrest in Egypt continues to weigh on tour operators, particularly in France. Thomas Cook said that, excluding Egypt, cumulative bookings were up 5 per cent and that “the gross margin in northern Europe had improved year-on-year” despite a 2 per cent drop in average selling prices.
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