London / Bloomberg
Thomas Cook Group Plc, the British originator of the package holiday, said public concern about terrorist attacks is prompting an upturn in demand for organized tours as people fear being stuck abroad on their own.
While attacks on tourists in Tunisia, Egypt and Istanbul, as well as the Paris killings, have led some people to hold back on booking a summer break, those still keen to travel are increasingly opting for deals combining flights, airport transfers and a hotel, Chief Executive Officer Peter Fankhauser said. “People are buying more all-inclusive,” he said on a media call. “That’s a consequence of the volatile environment, and of our customers seeing that we really care when there is a crisis, like in Tunisia, or in Sharm El Sheikh.”
A revival in package deals could slow a rise in independent travel that’s been spurred by the expansion of low-cost airlines and online travel agencies. Tour operators, which trace their history back 175 years to Thomas Cook’s first organized rail tours, say they’re more effective in dealing with a crisis or evacuating clients because they have representatives in the resort.
Tourists have been actively targeted in recent terror events, with a gunman slaying 38 mostly British people last June in the Tunisian town of Sousse, 33 of them clients of Thomas Cook rival TUI AG. A suicide attack in Istanbul killed 10 Germans last month, and a jet filled with Russian holidaymakers broke up on departing Sharm El Sheikh, Egypt, in October after a suspected bombing.
TUI reported a similar shift toward the package holiday after a volcanic eruption in Iceland in 2010 caused airlines to cancel more than 100,000 flights amid concern that ash might stall engines. A shutdown of north European airspace left thousands stuck in Mediterranean resorts and across the Atlantic.
Bookings for this summer are down 5 percent so far, Thomas Cook said, with 29 percent of the company’s total offering sold to date. Fankhauser said he has slashed the offering to Turkey by 29 percent following the Istanbul deaths while adding more beds in the western Mediterranean, chiefly in Spain. TUI also said this week that Turkish demand has declined.
Underlying revenue in the three months ended December 31 rose 1 percent to 1.41 billion pounds ($2 billion), with the underlying loss narrowing to 40 million pounds, Thomas Cook said in a statement. Tour operators typically lose money in the winter season.