Turkey and Egypt are back on the itinerary of European vacationers this summer as terrorist attacks two years ago fade from memory and rising hotel prices make Spain less affordable for budget-minded holiday-goers.
Tour operator Thomas Cook Group said on Thursday (February 8) that it’s shifting more capacity to those warm-water destinations in the eastern Mediterranean. In Spain, meanwhile, the London-based company said its margins are being squeezed by higher hotel prices and competition from too many airline seats.
“Spain is getting more expensive this summer, again, compared to very good value offered in the eastern Mediterranean, including Turkey and Egypt,” Chief Executive Officer Peter Fankhauser said on a call with journalists after reporting first-quarter results. “I’ve always said Turkey will come back, it offers excellent deals and great value for money, and it seems to be happening now.”
Spain remains the tour operator’s biggest market, but the share of customers going there is declining as other destinations grow faster. That’s good for Thomas Cook, as it generates higher profit margins from those destinations.
First-quarter sales advanced 7%, and the seasonal loss in the quarter narrowed, Thomas Cook said. Bookings for winter have risen 8% so far, with 80% of its program sold, while for the more important summer 2018, bookings are “encouraging”, with about one-third of the offering sold.
The company is also adding 10% to capacity at its airlines after the collapse of Air Berlin in Germany.
News by Bloomberg, edited by Hospitality Ireland