Big Two trading updates to shed light on market trends

Big Two trading updates to shed light on market trends

Trading updates by Tui Group and Thomas Cook this week will shed light on the latest summer booking trends in the wake of last year’s terrorist attacks in Tunisia and Egypt.

Thomson and First Choice owner Tui said in December that it had taken a €52 million hit from the Sousse killings in June.

Tui cut its guidance for the year ahead after cancelling all flights to Sharm el-Sheikh following the terrorist bombing of a Russian airliner.

Tui has 13 hotels in the Red Sea resort out of a total of 45 in Egypt.

Concerns have been mounting across the travel sector that recent terrorist attacks in Paris, Egypt and Thailand could continue to dampen consumer confidence and drive down passenger numbers.

But the group – which is forecasting a 10% increase in earnings this year – is expected to be handed a welcome boost from the tumbling oil price, helping to drive down the cost of running its cruise ship and airline businesses.

Tui releases its first quarter report for the 2015-16 financial year tomorrow (Tuesday) alongside its annual general meeting.

Joint chief executive Peter Long said in December that trading for the summer 2016 season was strong, with bookings from the UK ahead by 11% and nearly a quarter of the programme already sold.

Meanwhile, Thomas Cook is set to outline the impact of the recent terrorist attacks on its own financial performance when it updates the market on Thursday.

The group may have seen bookings come under pressure, with analysts expecting consumer confidence in the holiday sector to have taken a knock in the wake of the recent atrocities in Paris and Egypt.

And there is mounting evidence that the zika virus could be having a damaging impact on customer appetite for holidaying in the Caribbean, after Jamaica announced it had been infected by the virus.

Analyst Will Wallis at Numis said a consequence of the terrorist attacks and the Zika virus could be a drive towards more people wanting to holiday in the Mediterranean.

But he told the Express: “This poses logistical problems for Thomas Cook, which may have difficulty in getting access to sufficient accommodation at some popular resorts.”

Cook’s full-year earnings for 2016 are expected to range between £199 million to £232 million.

The group posted its first annual bottom line profit for five years in November last year, despite a £130 million sales hit from the Tunisian beach and hotel terrorist attacks in June.

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