Thomas Cook Group today signalled further global integration as it reported all markets to be trading “in line with expectations.”
Europe’s second largest travel business has started to implement a new operating model – a set of initiatives which aim to further improve product quality with a core focus on own-brand hotels and airline.
The aim is to eliminate duplicated activities “by creating a set of efficient, common technology platforms and process methodologies”. Further progress is due to be disclosed from next year.
In a trading update this morning, Cook revealed that northern Europe has enjoyed particularly strong trading in the second half of the year.
The current summer season is about 91% sold for the group as whole, in line with the same time last year.
“In terms of destinations, with Tunisia effectively closed for the time being, we have seen a significant increase in the number of customers travelling to Greece and Egypt, while our strategy to invest in long-haul routes is paying off, with particularly strong growth in holidays to the USA and the Caribbean,” Cook said.
Summer capacity from the UK is 95% sold, 1% ahead of the same time last year, with average selling prices up by 4%, both for package holidays and for seat-only bookings on Thomas Cook Airlines.
This reflected strong demand for differentiated holidays and flights particularly to long-haul destinations, as well as growth in the Signature premium holiday offer following its relaunch last winter.
“This follows a period of significant investment, both in the quality of the hotels we offer in the UK, and in our airlines through the introduction of brand new and refurbished aircraft,” Cook said.
“As in previous reporting periods, the expansion of our seat-only business within the product mix has led to a slight decline in the blended average selling price; in spite of this, the UK continues to perform comfortably ahead of last year.”
Cook said it was “encouraged” by strong booking and pricing trends for both the winter 2015/16 and summer 2016 seasons.
The winter programme is 39% sold, with all major source markets ahead of last year in terms of booking volumes, with improved pricing trends particularly in the UK and Northern Europe.
Cook plans to provide an update on its strategic partnership with Club Med owner, Chinese conglomerate Fosun, with its annual results on November 25.
“In particular, we expect our China joint venture, which will develop domestic, inbound and outbound tourism activities for the Chinese market, to become operational by the end of 2015,” the company said.
“We are also making progress with jointly establishing our hotel investment vehicle.”
Cook said its underlying business has continued to develop in line with our expectations, despite the impact of disruption in certain destinations and “significant foreign exchange headwinds”.
“Demand for our differentiated holidays has accelerated in northern Europe during the course of the year and has continued to grow in the UK, while conditions in Continental Europe have remained challenging.
“Our airlines have experienced strong demand as our strategy of investing in the customer experience, expanding our route network and growing our seat only business is paying off.
“Accordingly, we expect our financial results for the current financial year to be in line with our expectations at the time of our third quarter announcement in July.”
Chief executive, Peter Fankhauser (pictured), said: “Our trading performance for the summer season has progressed well, despite the impact of external shocks in certain destination markets, as previously announced. With more than a third of the winter 2015/16 season sold, the bookings profile for next year is also encouraging.
“Over the last three years we have made excellent progress transforming our business. We have developed a strong core holiday proposition based around our own-brand hotels, reduced our cost base, and strengthened our capital structure.
“The next phase of transformation will aim to better integrate our businesses across geographies, with a higher quality and more focused holiday offering delivered through our new operating model.
“With the benefit of our strong brands and through our absolute focus on customer needs, I am confident that this strategy will lead to an even better holiday experience for our customers, further improving our growth and profitability, and increasing returns to shareholders.”
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