Thomas Cook summer bookings down 5% amid Turkey slump

Thomas Cook has seen a slight increase in half-year revenues with bookings for summer 2016 up 6% if the struggling market to Turkey is discounted.

In a half-year results announcement to the City this morning the firm said it has made progress despite continuing challenges.

Group revenues were up to £2.67 million for the six months to the end of March and winter losses before tax were trimmed to £288 million from £303 million.

However, moves to shift capacity to the Western Mediterranean has not offset the slump in Turkey, meaning overall bookings for the summer are 5% down.

Peter Fankhauser, chief executive of Thomas Cook, said: “Thomas Cook has made significant progress in the last six months. 

“Despite disruption in some of our key markets, we’ve managed to slightly grow our revenues on a like-for-like basis, having anticipated the shift in demand away from Turkey, Tunisia and Egypt and into the Western Mediterranean and long haul destinations.

“At the same time, we’ve increased our underlying gross margin by 10 basis points thanks to our focus on selling higher quality holidays. The launch of Casa Cook in Rhodes this month is a great example of how we are widening our appeal to independent, style-conscious travellers.”

Cook said a focus on quality and service has been welcomed its customers leading to an increase in its Net Promoter Score of four points across all markets.

Fankhauser, who was quoted in the Sunday Times at the weekend about his regrets over the firm’s handling of the deaths of two children in Corfu in 2016, said: “Underpinning these results has been a fundamental change in our approach to our customers.

“The Corfu inquest was a turning point for Thomas Cook. It was clear to me that we needed to change our mindset and put the customer back at the heart of our business. I am proud of the way in which my colleagues across the business have embraced all the changes we have made.

“We’ve created a comprehensive new training scheme for all customer-facing staff, rolled out new software to better serve customers in resort, and introduced a 24-hour customer promise in 1,500 of our most popular hotels.

“It’s early days and there is more to do, but we’ve already seen a positive reaction from our customers, with improvements in the net promoter score across all our markets.”

Looking forward, Cook highlighted the continued challenges in its German and Belgian markets and forecast hitting EBIT for the full year of between £310 million and £335 million.

Fankhauser said: “As we look ahead to our busiest period, Thomas Cook is trading well to destinations other than Turkey, with particularly strong bookings to Spain and the USA.  

“However demand for Turkey – our second largest market last year – remains significantly below last year’s levels.  This has impacted our German Airlines business in particular. 

“We’ve also seen a sharp decline in demand in Belgium following the tragic attack at Brussels airport in March. 

“Despite the current market environment, I am confident that the actions we are taking to focus on customer excellence, strengthen our holiday offering, invest in omni-channel distribution, and bring our businesses closer together mean we’re well positioned to meet our existing growth expectations to FY18, creating value for both customers and shareholders.”

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