Thomas Cook, the struggling tour operator, has reported that its summer booking levels have fallen by a third. January is usually a key time for travel operators as people are booking their summer holidays but holidaymakers are spending less money on travel and this has caused a significant fall in booking levels.
The average decline in the industry is about 15 percent and so Thomas Cook’s figure is about double the industry average. The company was close to collapse in November after a period of very poor trading and in order to survive it had to turn to its lenders for additional funding.
The company is still the second-largest travel company in the UK but the reputation of the company has been severely damaged by its cash problems and the amount of consumer confidence in the company is at an all-time low.
In the last year the share price of Thomas Cook has fallen by over 90 percent after the exit of the Chief Executive as well as numerous profit warnings. The company has around 1300 shops in the UK and it is planning to turnaround its business in the next year. It is going to focus on fewer amounts of only higher quality hotels and is hoping to get more of its bookings done online.
Over the next year and a half the company plans to get rid of £200 million worth of its assets in order to reduce the amount of debt the company is in. Currently this figure is just below £900 million, a figure which saw an 11 percent rise in the last year. Investors feared the company would collapse after it asked for a loan of £100 million from its lenders and this caused investors to sell their share amid fears that the company would collapse.
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