| 12.4°C Belfast

Thomson's late offers a fly-away success

Thomson Holidays owner TUI Travel reported a rush of late summer bookings as holidaymakers looked to escape the dismal UK weather.

TUI said its summer programmes, which run to the end of October, were now almost fully sold after the strong booking activity in recent weeks.

It said it had benefited from a "flight to quality" after the failure of a number of smaller tour operators and airlines, as well as from the return to more normal weather conditions in northern Europe.

Despite the strong end to the summer, TUI warned that the greater proportion of cheaper deals in the lates market would affect profitability.

This echoed comments made in August after TUI was left with more holidays to sell as would-be sunseekers sat on their hands amid nerves over post-election tax hikes, decent early summer weather and the World Cup.

Bookings since the start of August were up 5% in the UK, compared with 2% previously after stronger demand for medium and long-haul destinations. In Germany, bookings were up 18% year-on-year since August.

Looking ahead to next summer, TUI said it expected to keep capacity similar to this year, while it should avoid the same level of significant cost inflation caused by fuel, currency rates and departure taxes.

Weekly Business Digest

Margaret Canning’s selection of the must-read business stories straight to your inbox every Tuesday morning

This field is required

The company also joined rival Thomas Cook in warning that it will have to review areas of its cost base in order to increase competitiveness.

TUI shares opened 3% higher as analysts described the update from the company as reassuring.