Price war looms, claims Thomas Cook – 20 Dec 2006

Thomas Cook is predicting a peak season price war as mass market operators attempt to claw back bookings for summer 2007 – currently 17% down on the previous year.

Head of holidays and commercial director Ian Derbyshire said the peak booking period – from December 26 to March 31 – would be “extremely competitive” as operators look to secure early bookings and recover from the disastrous summer of 2006, which finished 8% down on 2005 due to the World Cup, a heat wave and airport security alerts.

“It’s going to be very aggressive on price. The prices that will be out in the market will be extremely competitive,” he warned.

Derbyshire stressed Thomas Cook was outperforming the market for summer 2007 sales and claimed tour operators will be desperate to capitalise on pent up demand because a large percentage of people did not go on holiday last year.

Derbyshire said the purchase of wide screen television sets for watching the World Cup was among the array of reasons why last summer was “a difficult year”.

“There was a surge in people buying plasma TVs, one was bought every three seconds,” he said. “People spent their money last year on improving their home environment instead of going on holiday.”

Derbyshire added the industry’s package holiday capacity has been reduced by around 5% for summer 2007.

“However, 5% is nothing when you are talking about the sale of 16 million package holidays.”