Thomas Cook warns about a tougher 2010

May 20, 2009

Due to the weakened pound and rising unemployment, 2010 could be a more difficult year for the UK travel industry than this year, according to Manny Fontenla-Novoa, the chief executive of Thomas Cook.

The company reported a 20 per cent increase in pre-tax losses, of £280 million, for the six-month period ending 31 March. Thomas Cook noted that the underlying UK performance for the summer season was strong.

Fontenla-Novoa is saying, however, that the really tough period for travel companies will come next year. “We’ve bought our Euros for this year and we’re covered,” he commented, adding: “but next year will be really tough because of the currency change and the increase in unemployment, which will be much higher.”

In order to cover the fluctuation in currency, 2010 prices would have to be increased by 4.5 per cent, but the Thomas Cook executive said the company would negotiate with hotel operators to make sure that price rises would not exceed two to three per cent.

He stressed, however, that Thomas Cook would emerge from the current economic downturn as a stronger firm, and that people were continuing to book holidays.

“Those in work have more money and holiday demand is robust,” the travel executive said.

The average cost of a holiday sold by Thomas Cook has increased by nine per cent, to £536, due to the company selling more medium-haul, all-inclusive and five-star holidays.

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