TUI Travel says Brits are waiting on last minute deals for holiday bookings

by Ella FAIRCHILD on August 11, 2010

Thomson Holidays parent company, TUI Travel, is urging the travel industry to be wary of annual profits that could be hit by slowing sales as bargain hunting summer holiday seekers book last minute deals.

According to TUI, its third quarter sales have slowed significantly as Brits wait until the last minute to secure cheaper holiday breaks in the sun. TUI has reported a drop in shares of nearly 23p, almost 10 per cent, to a closing of 203.1p. The operator has blamed both the sales slowdown and the recovery from the volcanic ash cloud that crippled the UK travel industry.

The travel firm said that the majority of its losses could be accounted for by the volcanic ash crisis with pre-tax losses so far growing from £411m last year to £540m. The group did say, however, that it anticipated a return to full operating profit during 2010, but that it would be lower than analysts originally forecasted.

TUI has said that it is suffering from the latest trend of booking flights and hotels at the last minute. The problem is two-fold, said the travel firm, with Brits waiting for last minute bargains, but also waiting for fear of flight cancellations due to weather or striking.

The travel company further said that the trend towards waiting until later to book to get better deals would likely affect the firm’s ‘margin road map’ – a plan that outlines the firm’s average holiday profit for 2012 to be at 4.6 per cent.

As TUI Travel reports losses, however, many firms across the sector have begun reporting a slow rise in profits and the first signs of a recovery in the industry. Intercontinental Hotels just reported enjoying an increase in business travellers as the economy begins to recover slowly. The hotel group also announced expansion plans for China as business travel continues to grow in that market.

Comments on this entry are closed.

Previous post: Travelodge says no plans for Whitbread merger

Next post: Tube workers vote in favour of strikes