Thomas Cook expects the cost of holidays to popular destinations like Spain to rise next year as the pound is set to remain weak.
The travel giant said it expects Spanish holiday costs to rise between 5 to 10 per cent, also as a result of a loss of appetite for regions now deemed less safe.
However it said Turkey and Egypt, which have been affected by a period of political turmoil and terrorism, have seen demand pick up again in recent months.
Pain in Spain: Thomas Cook expects Spanish holiday costs to rise between 5 to 10% next year
Elsewhere, strong demand for holidays in Greece, Bulgaria and Cyprus gave Thomas Cook a boost, despite last month’s operational challenges, when it had to take care of hundreds of thousands of customers impacted by Hurricane Irma.
The travel giant reported an 8 per cent rise in UK bookings over the summer, with total booking up 11 per cent and average selling prices 1 per cent higher.
Along with its pre-closing trading update, Thomas Cook announced the retirement of its chief financial officer Michael Healy and a strategic partnership with LMEY investments, a Swiss-based hotel property development company, to develop and grow its own-brand hotel portfolio.
As part of the deal Thomas Cook has acquired a 42 per cent stake the German tour operator Aldiana, a company which Thomas Cook sold off in two chunks in 2005 and 2012.
Thomas Cook and LMEY will also work together to create a joint hotel investment platform, starting with hotel assets worth around £150million, which will be used to develop Thomas Cook’s own brand hotels.
The new partnership comes hot on the heels of a deal struck with Expedia, announced earlier this month, under which Expedia will become Thomas Cook’s preferred hotel provider for city breaks, and Thomas Cook will be able to sell its package holidays on Expedia’s global website.
New deal: Thomas Cook announced a partnership with a Swiss-based hotel property development company that will help it develop and grow its own-brand hotel portfolio
Peter Frankhauser said he was delighted of the group’s strategic process and said: ‘The alliance with Expedia announced earlier this month will allow us to cut the complexity in our business and focus on our core holiday offering.
‘In addition, our new partnership with hotel property investor LMEY, announced this morning, gives us a stake in the popular German premium club brand Aldiana, and a platform from which to accelerate the growth of our own-brand hotels business.’
Laith Khalaf, senior analyst at Hargreaves Lansdown, said: ‘Aldiana means ‘the place where the happy ones live’ in Senegalese, we are told, and Thomas Cook will be hoping it lives up to its name.’
He added: ‘Fankhauser has previously said he wants the travel company to walk in its customers’ flip flops, and the deal with LMEY will allow Thomas Cook to strengthen its own brand offering where it can exert greater influence over the holiday experience.’
Thomas Cook also said it had provided support and took care of 22,000 of its customers in destinations impacted by devastating Hurricane Irma.
It said it was forced to evacuate thousands of customers in The Cayos in Cuba, which were the group’s worst hit resorts, while it also had 10,000 customers in Florida and 4,500 in the Dominican Republic. Around 15,500 of those customers affected were from the UK, it said.
The group reiterated that it expects full year operating profit to be in line with current market expectations. Shares fell by 0.9 per cent, or 1.1p, to 119.9p in morning trading.
Helal Miah, investment research analyst at The Share Centre, said: ‘The group’s update does not seem to suggest that consumers were putting off their holidays in the face of falling real incomes and, looking ahead, consumers are still making bookings as winter bookings are up 6%.’