In a trading update for the three months to June 30, 2018, Cook reported its 2018 programme to be 79% sold – a “similar” level to last year – with total bookings up 11% “supported by strong customer demand for Turkey, Egypt and Greece”. Summer 2018 was 86% sold for the UK market.
Since its last update in May, Cook admitted group tour operator bookings had been impacted by the “sustained period of hot weather” across Europe during June and July. However, it added group tour operator bookings were now in line with last year, with pricing up 4%.
In the UK, bookings were up 1% with pricing up 7%, “largely reflecting higher bed cost inflation to Spain”. Cook has seen “good growth” to higher-margin destinations such as Turkey and Egypt, but admitted this has not been enough to fully offset the margin pressure that has largely impacted holidays to Spain to date.
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Northern Europe bookings have also softened since the last update due to the hot weather with bookings now up 2% and pricing up 4%.
More generally, for the third quarter group revenue increased by 10% to £2,479 million, “driven by strong customer demand for holidays to Turkey and North Africa”.
Revenue was up in all segments, with higher pricing and customer growth across the tour operating and airline businesses, Cook said.
Gross profit of £443 million was £15 million lower than last year, while gross margin of 17.9% was a decline of 240 basis points over the same period last year.
“This decline reflects continued margin pressure in our UK tour operator, particularly to the Spanish Islands where we continue to see aggressive pricing from the competition and bed cost inflation from hoteliers,” said the company.
Group operating profit improved by £1 million on a like-for-like basis to £14 million and group airline operating profit grew by £5 million, helping to offset a £6 million reduction in operating profit for the tour operator.
