Thomson Holidays owner gives cautious future outlook

by Ella FAIRCHILD on December 3, 2010

Thomson Holiday’s owner TUI Travel issued a cautious outlook for the upcoming 2010/2011 fiscal year as the UK tour sector makes a slow recovery.

The company published Thursday a four per cent rise in pre-tax profits for a total of £337million. But revenues fell by two per cent dropping to £13.5billion.

Many UK tour operators have seen a hard year with the Icelandic volcano eruption and weak consumer spending causing many firms to lose profit. As a result, TUI’s branches in both the UK and Ireland have fallen nearly 10 per cent between them, despite late summer bookings picking up after July.

Chief executive of the travel group, Peter Long said that since July, the tour operator has enjoyed strong demand, but that trading conditions in the UK and throughout Europe still remained uncertain. He added, though, that the upcoming year had a positive trading outlook.

TUI Travel’s financial postings come only one day after Thomas Cook recorded pre-tax profit falls of nearly eight per cent. Revenues for the rival tour group dropped an additional 4.1 per cent.

Equity analyst Keith Bowman, an analyst at Hargreaves Lansdown Stockbrokers, said that TUI continually retained high valuation ratings against its rivals, because it has diverse package offerings such as biking, sailing and other types. He said, because of this, TUI can offer a wider appeal to reach more travellers.

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