© The Financial Times Ltd 2015 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
June 15, 2012 11:08 pm
Tui Travel has likened the impact of the eurozone crisis on the Greek holiday market to that of the Arab spring, as the UK’s biggest tour operator by customer numbers said British tourists were shunning the country for other destinations.
The company, which owns the Thomson and First Choice brands, said its late-market deals, which are booked six weeks or less from the departure date, were dominated by hotels in Greece.
Peter Long, chief executive, said it was not surprising people were choosing to travel elsewhere.
“This year there is more capacity in the late market in Greece – that’s no surprise. Last year there were great deals to Tunisia, Morocco and Egypt.”
Tui said other destinations such as Spain had benefited from the trend.
Holidays to Greece account for about a 10th of UK business for both Tui and its rival Thomas Cook.
Thomas Cook said it was advising Greece-bound clients to carry small-denomination euro notes to minimise disruption in the event of a Greek exit from the eurozone. Clients could then pay for goods in euros and receive small amounts of drachma in return.
“Best advice is to carry small-denomination notes – ie €5, €10, and €20s,” said Thomas Cook in a statement. “Most of our holidaymakers are on the country’s islands, where you’d never know anything was going on . . . The banking system is operating as normal and retailers continue to accept credit and debit cards.”
Thomas Cook has cut its overall UK holiday capacity 13 per cent and Tui 6 per cent to adjust to the consumer spending downturn and the trend for “stay-cations”, where people holiday close to home.
Both tour operators said they had sold more than half of their summer holidays.
Steve Endacott, chief executive of the On Holiday tour operator, said the full-year profitability of Tui and Thomas Cook would be tied up with their late-market holiday sales.
“Given rising cost inputs, especially airline fuel, the problem is not the number of holidays that will be taken but the need to get a higher price for them in a market where there is much weaker demand,” Mr Endacott said.
“Around 50 per cent of all late bookings are sold at a loss, so the question is by how much will it erode their profitable business?”
The tourism sector, which accounted for 16.5 per cent of Greece’s gross domestic product last year, has already suffered as German bookings for popular island destinations have halved, according to hoteliers.
George Tsakiris, president of the Greek Hoteliers’ Chamber, estimated that more than 500,000 last-minute summer bookings normally made in early June had been lost because of worries about the election this weekend.
James Hollins, an analyst at Investec, said Greece would continue to be a tough market.
“While in past years the late holiday market would have a choice of a number of countries, this year customers will have a choice of lots of locations inside Greece,” he said.
There is a silver lining for Greek tourism: Britain’s sodden June. “The weather will be the difference between a difficult year and a disastrous one for the tour operators,” said Mr Endacott.
“With a bad Easter weekend followed by a rainy Jubilee, people are convinced it will not be a barbecue summer and bookings have picked up markedly.”
Copyright The Financial Times Limited 2015. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.
Sign up for email briefings to stay up to date on topics you are interested in