Newspaper article The Journal (Newcastle, England)

Silver Lining in Britain's Clouds for Holiday Firms; TRAVEL

Newspaper article The Journal (Newcastle, England)

Silver Lining in Britain's Clouds for Holiday Firms; TRAVEL

Article excerpt

Byline: Iain Laing ? 0191 201 6429 ?

THE appetite of Britons for holidays abroad will be assessed next week when travel giants Thomas Cook and TUI Travel post trading updates.

Thomas Cook and Thomson Holidays parent TUI Travel will reveal if the boost seen from the miserable early summer weather continued when the rain finally eased off and as Britain celebrated the Olympics.

Both groups said they had benefited from the record wet weather between April and July as rain-soaked holidaymakers escaped to Europe.

TUI Travel, which updates the market on Thursday, remarked on a "strong improvement" in overall summer bookings from the UK as of July 29, down 5% against the 6% decline reported in April.

A weakened euro also proved attractive for many Britons, with Majorca, Ibiza and Menorca among the most popular short-haul destinations, as the better exchange rate made holidays to Europe more affordable. But the weaker euro is a doubleedged sword for TUI, as the exchange rate is also impacting profits.

TUI - Europe's biggest tour operator, whose brands also include First Choice - posted a 16% fall in underlying profits to PS74m in the three months to June 30, as sales fell 2% to PS3.7bn, with figures also impacted by the timing of Easter. Rising fuel prices are another headache, although TUI is already around 60% hedged for next summer.

Analysts have been cheered by news of the better-than-expected demand for holidays in the early summer, which is expected to counteract some of the exchange rate pressures.

Thomas Cook, which updates on Friday, said in August that its summer programme was 88% sold after a buoyant July for bookings, although cumulative bookings in the UK were still down 1% on last year as at July 29. The firm's new chief executive, Harriet Green, is attempting to lead a turnaround after a torrid time for Thomas Cook. …

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