Analyst GfK says Brexit uncertainty continues to hit demand for this summer.
GfK reported summer 2019 bookings in the week to last Saturday (February 9) down 8% on the comparable week a year ago, following a 10% decline the previous week and 9% fall the week before that.Yet the cumulative decline since January 21, the last day on which summer bookings rose year on year, still left season-to-date summer bookings up 3% on last year – reflecting the sector’s strong position at the turn of the year.
Consumer media warnings of cancelled flights, invalid passports and border delays appear to have taken a toll. But remarkably, GfK reported bookings for April departures – immediately following Britain’s planned EU‑leaving date on March 29 – remain 14% up year on year.
This mainly reflects the movement of Easter from March in 2018 to late April this year, but GfK senior client insight director David Hope said: “It’s still a positive sign.”
Summer 2019 average selling prices were also up 3% year on year in the past week despite reports of discounting.
Bookings for the current winter remain 4% up year on year, after a 2% increase in the last week.
Hope said: “Cumulatively, the market is not too bad.” But he noted: “The uncertainty is having an impact, and everyone expects that to continue until there is some clarity.”
Thomas Cook reported a first-quarter underlying operating loss of £60 million for the three months to December, £14 million worse than last year, and announced a review of its group carrier which is likely to result in the airline’s sale.
Chief executive Peter Fankhauser said Cook needs “greater financial flexibility and increased resources” to accelerate its core strategy, with cash to be used to pay down debt and invest in its own-brand hotels.
He noted “a weaker performance in the UK”, saying: “Some customers appear to be putting off booking amid uncertainty about Brexit”, but added: “We feel well prepared whatever the outcome.”
Tui reported its underlying operating loss for the quarter to December more than doubled to €84 million. Chief executive Fritz Joussen reported “lower margins” due to “overcapacity in destinations such as the Canary Islands” and “sales of higher-margin products adversely affected by the weakness of the pound”, adding: “Customers continue to travel but are resistant to increases in price.”
