Uncertainty sees TUI with more cheap deals to sell

Thomson Holidays owner TUI Travel has been left with more cheap deals to sell after would-be sunseekers sat on their hands amid nerves over post-election tax hikes, decent summer weather and the World Cup, the firm said yesterday.

TUI, which has around four million UK customers, said disruptions from Iceland's volcanic ash cloud also dented trading as it warned of full-year results at the lower end of City hopes.

UK bookings have fallen 2 per cent since its last update in May and the firm now has more holidays to give away in the 'lates' market,

squeezing profits.

Hide Ad
Hide Ad

TUI, which is also braced for a hit from the pound's fightback against the euro, said the uncertainty was likely to linger as would-be holidaymakers waited longer before booking.

Chief executive Peter Long warned: "It remains difficult to predict how the later booking pattern will change over the next 12-18 months in light of the current economic environment."

The firm said the UK market had "slowed markedly" with overall industry bookings down around 10 per cent on the previous year. Thomas Cook, which dropped 5 per cent, is likely to report similar gloom later today.

Holidaymakers in the UK and Ireland account for almost a quarter of TUI's business, but it also came under pressure in other European markets.

Hide Ad
Hide Ad

Bookings in the Netherlands were dented by the country's run to the World Cup final, but have since recovered. In Germany, holidaymakers switched to less profitable overland tours amid concerns over more disruption from the ash cloud.