Holiday trading remains strong

May 14 2008 by Iain Laing, The Journal

THOMSON and First Choice owner TUI Travel has said trading remains buoyant as households showed no sign of ditching summer travel plans.

TUI revealed holiday sales in the UK for the past six weeks were up 8% on a year earlier, with 61% of its UK programme now booked.

The group added that medium and long-haul trips from the UK performed strongly, with sales up 21% and 8% in the six-week period. Greece, Turkey, Egypt, the US, Dominican Republic and Mexico have been the most popular destinations.

TUI Travel chief executive Peter Long said there was no evidence of deteriorating consumer sentiment in its booking patterns, or 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,” he said.

TUI said its customers were not facing surcharges due to the weaker pound compared to the euro. In the past six months, the rate has dropped from around 1.45 euro to 1.26, causing other operators to ask customers for more money.

Mr Long said: “We bought the euro last year at good rates, so our customers are in a better position.”

He said there had been no visible shift in demand for eurozone destinations, with demand for Spain, Greece and Turkey still strong.

The group imposed a fuel surcharge last month amid soaring oil prices. Short-haul passengers have to pay an extra £5, medium-haul £10 and long- haul travellers an additional £30.

TUI’s existing customer capacity in the UK is 13% lower than last year, following a purge of loss-making routes, particularly short haul across Europe. A number of city routes have been culled, reflecting the growing trend for consumers to book their own short-haul trips online.