Summer 2012 bookings at TUI Travel during the key booking month of January were little changed from last year, but the package tour operator is consoling itself that it is doing a lot better than the rest of the industry.

The group said it outperformed the UK leisure travel market with its bookings in January, with summer holiday reservations flat year-on-year against a 14% decline seen by the sector as a whole.

Revenue rose 5% to £2,845m from £2,716m in the final quarter of 2010, while the underlying operating loss thickened to £109m from £86m the year before, largely as a result of fewer French holiday-makers en vacances in North Africa.

Organic revenue growth was 4%, driven by strong pricing across the group and volume growth in the Accommodations & Destinations offering.

Loss before tax widened to £158m from £143m in the final quarter of 2010.

Winter 2011/12 and Summer 2012 bookings overall have progressed as anticipated since the company's last update at the end of November, with an improvement in the cumulative booked position in all key source markets.

Winter bookings in the UK have improved since the end of November, with the year-on-year decline in cumulative bookings easing from 12% to 10%. Average selling prices, meanwhile, are up 5% on the corresponding period the year before.

Summer bookings from the UK were down 7% year-on-year at January 29th, but this represents an improvement on the 11% year-on-year decline at November 27th. The company has sold 35% of its UK summer capacity.

The situation is not so rosy across the Channel in France, where volumes are down 13% to date, due to the difficult trading background the company is encountering, particularly in North Africa. The group has sold just over 12% of its summer programme in France.

In view of the cash flow difficulties recently suffered by rival Thomas Cook, shareholders will be pleased to learn that TUI's management is satisfied with its funding and liquidity position.

"We are satisfied with the progress in trading since our last update and are particularly pleased with the performance of differentiated product, which continues to book earlier, demonstrating the resilience of our business model," said Peter Long, Chief Executive of TUI Travel.

"We have also had a particularly good performance in online sales," he added.

"Our performance remains in line with our expectations and the flexibility of our business model means that we are able to manage capacity to match profitable demand. In addition, our business improvement programme is progressing according to plan. These self-help measures, coupled with our strategy of increasing differentiated product, controlled distribution and online sales, will help us to deliver in the current challenging macro-economic environment," Long maintained.

The shares took an early morning dip, shedding 3.1p at 203.4p.


jh

Related share prices
TUI Travel (TT.) share price