Winter bookings down at TUI Travel

Britain’s biggest holiday firm TUI Travel outperformed its rival Thomas Cook today but warned winter bookings in the UK had slowed down in the face of weak consumer sentiment.

The Thomson Holidays and First Choice owner reported a 12 per cent year-on-year drop in winter 2011/12 bookings as at November 27, compared to an 11 per cent decline at its last update on September 11, as capacity - hit by turmoil in Egypt and Tunisia - was reduced 9 per cent.

But the recent weak trade followed a record full-year performance as higher margin holidays helped drive a 15 per cent increase in underlying operating profits in the UK to £147m and an 18 per cent rise in group profits to £471m in the year to September 30.

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TUI said sales of differentiated products - concept holidays unique to TUI brands - such as water park SplashWorld, Holiday Village resorts and child-free Couples holidays, grew 14 per cent in the UK in the year to September 30.

The robust performance comes shortly after Thomas Cook spooked holidaymakers and investors when it turned to its banks for extra support in the wake of deteriorating sales.

Peter Long, chief executive of TUI Travel, said: “We are very pleased with our robust performance in 2011 and have delivered another year of profit growth, against a backdrop of unrest in key North African destinations and weak consumer sentiment in some source markets. The UK, Nordic region, Belgium, the Netherlands, Canada and Austria delivered record results. These achievements reflect the strength of our strategy to increase differentiated and exclusive product sales, increase controlled distribution with a focus on online to enhance our customer access and reduce distribution costs, and our delivery of the turnaround and cost efficiency programmes.

“We remain focused on this successful strategy and through our new business improvement programme we have self help measures in place to help offset the difficult macro-economic environment, including clear plans in place for Germany and France. In addition, we continue to strengthen our cash flow in order to fund the dividend and growth. All of which means that, even in the current challenging market conditions, we continue to operate from a position of strength.”

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