Hard-up consumers 'still need a holiday' | Business

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It was last updated at 17:06 on May 13 2008.</div> </div> </div> <p>Soaring food prices and mounting household bills may be denting Britons' hunger for high street shopping but the annual holiday is still safe, according to an update today from Europe's largest travel group.</p><p>Tui Travel, home to the Thomson and First Choice businesses in the UK, said trading for this summer remained strong and it has been able to hold up its prices. UK sales over the last six weeks were up 9% on a year ago and Tui has been left with fewer holidays left to sell. Winter holiday bookings from the UK were up 15%.</p><p>"We see no evidence of deteriorating consumer sentiment in our booking patterns, in the average holiday duration booked, average selling price or cancellation rates," said chief executive Peter Long.</p><p>"This confirms our research that the annual holiday is an important component of the family budget."</p><p>Nor do the knock-on effects of the credit crunch seem to be making people opt for cheaper holidays, Tui said.</p><p>It reported strong demand for premium products such as tailor-made, child-free Thomson Gold holidays, adding: "Our customers are proving resilient and booking patterns and trading metrics show no indication that customers are trading down or altering their holiday plans as a result of economic conditions." </p><p>Tui, which bought its rival First Choice last year in a 拢12bn merger, said integrating the businesses was going well and it was confident of delivering "at least" 拢150m of synergies.</p><p>Long admitted the company faces a "more challenging economic environment" but said Tui would be able to cope with the pressures by cutting out loss-making flights, making the most of well-known tour operator brands and remaining flexible.</p><p>Today's first-half results showed underlying losses before tax narrowed to 拢294m from a 拢339m loss the year before.</p><p>It said the improvement reflected strong performances in the UK and Nordic region and a "significant turnaround" in France.</p><p>Tui, which said is paying a second interim dividend of 2.8p per share, sought to assure investors that it was well hedged to deal with fluctuating fuel prices and foreign exchange rates in the future.</p><p>Still, analysts at Collins Stewart said they remained cautious about the medium-term outlook given the deteriorating economic outlook in the UK.</p><p>"Travel demand lags consumer expenditure trends by six to 12 months, so we have never expected '08 to show any deterioration; we believe '09 will be a different market," they said in a research note.</p><p>"If the demand environment does weaken further, it could become more challenging to offset the increased fuel cost next year (we estimate over 拢200m). Initial plans to cut the flying program by a further 13% next year will help."</p><p>But Tui remains their preferred choice in the sector, they added.</p><p>Shares in Tui fell more than 1.5% today to 255p.</p> </div> <div id="related"> <ul id="article-toolbox-side"> <li class="printable"><a href="https://web.archive.org/web/20080514055031/http://www.guardian.co.uk/business/2008/may/13/tuitravel.travelleisure/print" rel="nofollow" id="printlink" class="printable rollover" name="&lid={article}{Print}&lpos={article}{1}"><img src="https://web.archive.org/web/20080514055031im_/http://image.guim.co.uk/static/51611/original/common/images/icon_print.gif" alt="Print this" class="trail-icon"/><span>Printable version</span></a></li> <li><a class="sendside rollover" href="https://web.archive.org/web/20080514055031/http://www.guardian.co.uk/email/334090469" id="sendlinkSidebar" title="Opens an email form" name="&lid={email-ARTICLE}{Hard-up consumers 'still need a holiday'}"><img src="https://web.archive.org/web/20080514055031im_/http://image.guim.co.uk/static/51611/original/common/images/icon_email-friend.gif" alt="Send to a friend" class="trail-icon"/><span>Send to a friend</span></a></li> <li> <a class="sendside rollover" href="https://web.archive.org/web/20080514055031/http://www.guardian.co.uk/share/334090469" id="sharelinkSidebar" title="Opens a share this page in a new window" name="&lid={share-ARTICLE}{Hard-up consumers 'still need a holiday'}"><img src="https://web.archive.org/web/20080514055031im_/http://image.guim.co.uk/static/51611/original/common/images/icon_share.gif" alt="Share this" class="trail-icon"/><span>Share</span></a> </li> <li><a href="https://web.archive.org/web/20080514055031/http://www.guardian.co.uk/users/clippings/add?r2PageId=755889" id="clippable" class="rollover" name="&lid={clip-ARTICLE}{Hard-up consumers 'still need a holiday'}&lpos={myclippings}{1}"><img src="https://web.archive.org/web/20080514055031im_/http://image.guim.co.uk/static/51611/original/common/images/icon_clip.gif" alt="Clip this" class="trail-icon"/><span>Clip</span></a></li> <li><a href="https://web.archive.org/web/20080514055031/http://www.guardian.co.uk/contactus/334090469" class="sendside rollover" id="contactlinkSidebar"><img src="https://web.archive.org/web/20080514055031im_/http://image.guim.co.uk/static/51611/original/common/images/icon_email-us.gif" alt="Contact us" class="trail-icon"/><span>Contact us</span></a></li> <li class="resize"><img src="https://web.archive.org/web/20080514055031im_/http://image.guim.co.uk/static/51611/original/common/images/icon_font.gif" alt="Resize font" class="trail-icon"/> <a href="/web/20080514055031/http://www.guardian.co.uk/help/accessibility" id="larger-sidebar" name="&lid={Signedin}{Text Larger}&lpos={Signedin}{6}">larger</a> | <a href="/web/20080514055031/http://www.guardian.co.uk/help/accessibility" id="smaller-sidebar" name="&lid={Signedin}{Text Smaller}&lpos={Signedin}{7}">smaller</a> </li> </ul> <div class="send" id="send-share-side"> <div class="send-inner "> <div class="share-top"> <h3>Share</h3> <span><a class="sendside">Close</a></span> </div> <ul> <li> <a class="digg" href="https://web.archive.org/web/20080514055031/http://digg.com/submit?phase=2&url=http%3A%2F%2Fwww.guardian.co.uk%2Fbusiness%2F2008%2Fmay%2F13%2Ftuitravel.travelleisure&title=Hard-up+consumers+%27still+need+a+holiday%27" name="lid={share}{Digg}">Digg</a> </li> <li> <a class="reddit" href="https://web.archive.org/web/20080514055031/http://reddit.com/submit?url=http%3A%2F%2Fwww.guardian.co.uk%2Fbusiness%2F2008%2Fmay%2F13%2Ftuitravel.travelleisure&title=Hard-up+consumers+%27still+need+a+holiday%27" name="lid={share}{reddit}">reddit</a> </li> <li> <a class="google" href="https://web.archive.org/web/20080514055031/http://www.google.com/bookmarks/mark?op=edit&bkmk=http%3A%2F%2Fwww.guardian.co.uk%2Fbusiness%2F2008%2Fmay%2F13%2Ftuitravel.travelleisure&title=Hard-up+consumers+%27still+need+a+holiday%27" name="lid={share}{Google Bookmarks}">Google Bookmarks</a> </li> <li> <a class="yahoo" href="https://web.archive.org/web/20080514055031/http://myweb2.search.yahoo.com/myresults/bookmarklet?u=http%3A%2F%2Fwww.guardian.co.uk%2Fbusiness%2F2008%2Fmay%2F13%2Ftuitravel.travelleisure&t=Hard-up+consumers+%27still+need+a+holiday%27" name="lid={share}{Yahoo! 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