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 30 August 2008 15:47 BST

Holiday sales up despite credit crunch

Tuesday, 13 May 2008 14:25
Holiday sales up at TUI Travel

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Holiday company TUI Travel has reported a strong winter season, despite consumers tightening their belts during the economic slowdown.

TUI, which acquired First Choice last September, improved its operating loss for the first half by £71 million, driven by strong trading in the UK and Nordics, in addition to a significant turnaround in France.

Travel companies tend to make a loss in the slower, winter season and make up for it in the summer months.

Current trading for Summer 2008 is up eight per cent in the UK, with 21 per cent less product left to sell and strong pricing achieved over the last six weeks, the company, which also owns Thomson, said.

Winter trading for the 2008/2009 season is also up 15 per cent in the UK, TUI added.

Chief executive Peter Long said: "We see no evidence of deteriorating consumer sentiment in our booking patterns, in the average holiday duration booked, average selling price or cancellation rates.

This confirms our research that the annual holiday is an important component of the family budget."

The group said it is "well hedged" in respect to spiralling fuel costs, which is putting pressure on the airline industry.

Airlines 'hedge' their fuel costs by agreeing a price in advance - if the price of oil increases, the company saves money, but if the wholesale price falls it loses out.

In order to keep down these costs, TUI is operating six fewer aircraft in Winter 2008/09 and ten fewer aircraft in Summer 2009 compared to prior year.

The company confirmed that it will meet its expectations for the year ending September 30th, 2008.End of story


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