TUI warns of poor winter sun demand
DEMAND for summer holidays is holding up in the recession, Thomson owner TUI Travel said yesterday, but it warned the winter season could be bleak.
TUI said that a surge of late-bookings, prompted by dismal British weather, has left the group with fewer summer holidays left to sell than last year.
Late summer bookings contributed to third quarter net profits of £33m, compared to a net loss of £215m in the same period last year, when the group wrote down the value of various assets.
The firm responded quickly to falling demand by slashing capacity in the UK and Germany, pushing revenues for the quarter down to £3.58bn from £3.62bn in 2008.
The weak pound boosted revenues from outside the UK and, on a constant currency basis, revenue was down by nine per cent.
Swine flu dented profits by around £8m, the firm said, after it had to refund cancellations and fly home travellers who were affected by the virus.
TUI warned that winter bookings were down by 31 per cent compared to last year, although trading has improved marginally in the last four weeks, which are down just six per cent on the same period in 2008.
TUI chief executive Peter Long said: “We anticipate market conditions will remain challenging and expect the later booking pattern to continue in the next financial year.”