Thomas Cook switching to Greece after Spanish rises
Travel giant Thomas Cook has hiked prices for summer package holidays and shifted deals towards Greece after facing competition and soaring hotel costs in popular Spanish island resorts.
The group, which operates around a dozen shops in Northern Ireland, has raised the cost of its package deals by 5% after hoteliers in Spanish islands upped prices by around 6% to 8% following surging demand as sun-seekers switched from Turkey and Egypt in the wake of terrorist attacks.
Thomas Cook said it was also seeing intense competition as airlines and holiday firms ramped up services to destinations like Majorca and the Canary Islands, but stressed it wanted to focus instead on more profitable high-end holidays "rather than chase volume growth".
It said this had left sales of package holidays for the key summer season "slightly behind last year's levels", while the overall average selling price is 9% higher as it has also sold more expensive holiday deals.
Total UK summer bookings are 1% higher, with average selling prices across holidays and flights up by 2% as the package holiday hikes are offset by falls in seat-only flight deals after airlines slashed prices due to competition and falls in fuel costs.
Shares in Thomas Cook slumped by as much as 10% after its third quarter update as it also warned over a cautious outlook despite seeing a 40% surge in group-wide bookings to Greece.
Underlying operating losses improved by 2% on a like-for-like basis to £49m in its typically quieter quarter to the end of December, but chief executive Peter Fankhauser said Thomas Cook remains "cautious about the rest of the year, given the uncertain political and economic outlook".
He raised concerns over Brexit, a raft of looming European elections, a stronger dollar and the threat of disruption.
But the group cheered moves to shift demand to Greece, which Mr Fankhauser called this summer's "stand-out" destination.
The firm forecasts 2.5 million holidaymakers booking to go to Greece this summer, up 500,000 on a year earlier.
This marks a recovery after the refugee crisis in the Mediterranean and wider Greek financial woes dented demand in recent years. Demand for destinations such as Cyprus, Bulgaria, Portugal and Croatia is also strong, according to the group.
Mr Fankhauser said there was no sign that Britons had been put off foreign holidays by the weak pound, but there had been a drop in bookings to the United States largely due to the pound hitting 31-year lows against the dollar since the Brexit vote.