Turkey and Tunisia are back, while Spain is sliding: that is the message from Thomas Cook, as it revealed its first quarter results.
The holiday giant said that it is moving capacity east from Spain for summer 2018, with “Turkey the standout market so far” according to the chief executive, Peter Fankhauser.
In normal years about a third of Thomas Cook holiday sales are to Spain, but in 2017 the proportion was 40 per cent.
Mr Fankhauser said: “The very strong demand for Spain is returning to slightly more normal levels. Spain is getting more expensive compared to very good value-for-money proposition we are seeing in the eastern Mediterranean.”
Greece is once again selling strongly for the summer, but the chief executive said: “Turkey has the potential to catch up to Greece.” He also said that Bulgaria and Egypt were performing well.
Next week Thomas Cook relaunches holidays to Tunisia after an absence of nearly three years, following an attack on the beach at Sousse that killed 30 British holidaymakers.
The winter programmes of three charter flights a week “are very well booked”, and the number of flights will double in the summer season.
On Brexit, Mr Fankhauser said: “We are concerned by the lack of clarity.” But he said that he remains “confident that the Government will find a solution and not take it to a cliff edge”.
Revenue for Thomas Cook increased by 7 per cent to just under £1.75bn, with the company benefiting from the collapse of Monarch and Air Berlin. The usual seasonal operating loss improved by £10m to £42m in the last three months of 2017. Selling prices from the UK have increased by 6 per cent over the winter.
Neil Wilson, senior market analyst at ETX Capital, said: “Demand is rising but Thomas Cook is facing significant margin pressure in holidays to Spain that is eating into profits. Nevertheless, as we noted in November after the full-year numbers, the recovery in other destinations points to a solid year ahead, particularly as these will offer better margins.”