TUI Travel Plc, Europe's largest tourism company, said sales so far this year are "strong" with bookings in the UK and Scandinavia gaining on demand for long-haul trips to destinations such as Thailand.
Package-holiday sales have gained five percent in the UK for the winter season and nine percent in Scandinavia, the English company said yesterday, Bloomberg News reported.
TUI Travel also posted an annual profit, recovering from a loss on goodwill charges last year. TUI AG's tourism unit and First Choice Holidays Plc combined to form TUI Travel in September to ward off Web travel agents and budget airlines. The company has cut the number of hotel rooms and airline seats it reserves to avoid having to sell off holidays at discount.
The merger will cut costs by at least 100 million pounds (US$204 million) within three years, managers have said.
"The company is addressing mainstream package difficulties with capacity cuts and better cost management," said Kate Pettem, an analyst at Landsbanki Securities in London. She has a "buy" rating on the stock.
TUI Travel shares rose as much as 1.6 percent and were up 1.75 pence, or 0.6 percent, to 284.75 pence at 10:49am in London. They ended the first day of trading in September at 285.5 pence. The company will be promoted to the benchmark FTSE 100 Index from the FTSE 250 Index on December 24, along with rival Thomas Cook Group Plc, created in June by a similar merger.
TUI Travel's winter-season revenue has risen eight percent in central Europe, matching growth in the western part of the region.
Vacation sales for next summer have climbed 11 percent both in the UK and in Nordic nations, the statement shows. Revenue for that season has gained eight percent in central Europe and 23 percent in western Europe, with activity holiday sales up 13 percent. The figures cover a period from October 1 to December 2.
(Shanghai Daily December 24, 2007)
