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Financially squeezed sun-seeking travellers boost package holiday sales

Package holidays have grown in popularity as holidaymakers aim to control their spending while abroad.

Budget-conscious travellers have contributed to a boost in bookings at Thomson Holidays owner TUI Travel, with Europe’s biggest tour operator affirming that there are 12% fewer holidays remaining to be sold than this time last year.

Package holidays are experiencing a surge in popularity as holiday-goers on a budget opt for what they perceive as secure holidays with a fixed price and no hidden charges.

This frame of mind means that overall summer bookings from the UK continue to outperform the industry, according to TUI Travel.

The group, which owns Thomson and First Choice, said it had sold around 86% of its summer holidays by the end of June. In addition, the number of all inclusive products that have been sold so far this summer have risen 6% since last year.

Bookings have also experienced a substantial rise due to the miserable British weather and the strength of the pound against the euro, which has made holidays to Europe more affordable.

Peter Long, chief executive of TUI Travel PLC, said: “Northern Europe has been pretty consistently bad from a weather perspective over the last couple of months and that has benefitted us with people deciding to book [holidays].”

Leading short-haul destinations currently include Majorca, Ibiza and Menorca while Turkey, Egypt, Tunisia and Morocco are proving to be popular long-haul destinations.

Even though bookings are down 5% from last year, TUI affirmed that this is a “strong improvement” on the 6% decline it reported in April.

However, they added that underlying operating profit – which fell 16% to £74 million in the three months to the end of June – suffered because of the earlier Easter this year and the poor performance of its French business.

Despite winter sales making a good start, chief executive of TUI Travel PLC Peter Long reduced his forecast for underlying profits for the year to September by £18 million to £482 million. However, this would still represent a rise on the £471 million last year.

Individuals travelling on a tight budget this summer might want to consider taking out a prepaid travel money card to prevent over-spending while abroad.