Ho li d a y b l u e s
Spanish boom wipes £160m off value
SHARES in Thomas Cook plunged yesterday as it counted the cost of a Spanish holiday war.
Around £160million was wiped off the travel giant’s stock market value as it revealed profits in its UK arm dived 40% in the year to September 30.
Tour operators have been battling to bag hotel rooms in Spain as families flock there amid security concerns about Turkey and Egypt.
More than four in 10 Thomas Cook holidays sold in the UK this summer were to Spain, up from around 30% a few years ago.
Further pressure has been piled on the firm by the fall in the value of the pound following last year’s Brexit vote.
Thomas Cook increased its prices for Spanish holidays by 6% this summer to claw some of those losses back.
But it warned prices for Brits would jump another 10% next summer.
Boss Peter Fankhauser said customers were beginning to return to Turkey and Egypt, as well as destinations outside of the eurozone, in an attempt make their money go further. A big bill for compensating holidaymakers who claimed they fell ill abroad also dented Thomas Cook’s UK profit margin, which sank from above 6% to around 4.5%. But the company will hope its legal action against a couple who lodged a fake sickness claim will stem the tide. Deborah Briton and partner Paul Roberts were jailed last month for trying to claim £20,000 compensation by saying they became ill due to food poisoning while on holiday in Mallorca. Fankhauser said: “This is a small number of customers who are acting to the disadvantage of honest customers.” Yesterday’s 8% share price fall came despite Thomas Cook’s annual revenues rising £1.2billion to £9bn, and its debts falling £122m to £40m. The firm also raised its shareholder dividend by 20%. Fankhauser also hinted unprofitable high street branches could be closed due to a rise in online bookings. He said of the digital trend: “We have to follow the customer.”