Thomson Holidays owner TUI Travel revealed summer bookings had seen an early 9% spike as customers look to escape the UK’s weather.
Europe’s biggest tour operator said it continues to see “very strong” trading momentum in the UK despite a 4% increase in its average summer prices, with holidaymakers seeking to avoid another washout summer.
TUI expects to fly more passengers to sunny climes this season and has increased its capacity in the UK market by 3% and its share of the market by 4%.
UK and Nordic revenues for summer breaks showed double-digit growth, a fact which “particularly pleased” executives. The strong showing helped offset a weaker performance in other territories like France and Germany.
In all, 46% of seats on TUI summer holidays are already booked, with average selling prices and margins across all key markets up year-on-year.
The group which also owns brands including First Choice, Gulliver Travel and LateRooms.com said demand was driven by its online business and direct distribution, with online accounting for 40% of its sales in the UK.
The pre-close trading update, ahead of the company’s interim results, revealed that the firm expects to be “towards the top end” of previous guidance for 7-10% growth in operating profits for the period.
Chief executive Peter Long said that his firm had a “clear roadmap” for growth.
“Our strong operational performance over winter means we will deliver reduced winter losses,” Mr Long said.
“This very strong trading has continued into summer 2013, leaving us well placed to achieve a full-year performance towards the upper end of our growth targets.”
While sales in TUI’s core winter holiday business ended down 4%, with flat trading in the UK and a 30% fall in France, the firm narrowed seasonal losses thanks to capacity reduction measures.
TUI’s strong trading comes as rival Thomas Cook mounts a turnaround attempt, led by new chief executive Harriet Green. That restructure involves more than £400 million of cost cuts, axing 2,500 jobs and closing 195 high street travel agencies.
Yesterday, TUI said its own business improvement programme which was announced last year and is expected to cut £107m in costs was progressing “to plan”.
Analysts hailed the delivery of what had been expected to be a strong update, but Simon French at Panmure Gordon warned of difficulties ahead including the impact of the weak pound on cost inflation, and news on Boeing’s grounded Dreamliner plane.
“We think trading will likely get tougher from here particularly in the UK as weather improves (hopefully) and the group laps tougher comparatives in the lates market,” he said in a note.