Thomas Cook wilts in the European heat
Frankfurt — Thomas Cook Group has said that unusually hot weather is making northern Europeans far less enthusiastic about booking last-minute beach holidays, weighing on the UK tour operator’s earnings.
Summer bookings for the company’s tour businesses up to July 21 were unchanged from last year, according to a statement on Tuesday. Reservations had been up 3% to the end of May, leaving the outlook for full-year earnings at the lower end of market expectations, it said. Overall bookings across the group rose 11%, with the average selling prices falling 3% due to lower-yielding trips.
"The sustained period of hot weather in June and July has led to a delay in customer bookings," CEO Peter Fankhauser said in the statement, adding that this has hampered the company’s ability to raise margins by selling more last-minute trips. The shares fell as much as 5% before rebounding to trade 4% higher.
The first half of the summer across large parts of Europe has been marked by extreme weather, including record temperatures and heatwaves, the World Meteorological Organisation said, with 2018 "shaping up to be one of the hottest years on record". The high temperatures have affected Scandinavia, the UK and Germany, where most of Thomas Cook’s holiday-goers come from.
On Tuesday, the Thomas Cook CEO confirmed it’s open to a possible deal for its airline businesses, but said it had no current plans to sell its carrier.