London.—British travel groups TUI Travel and Thomas Cook reported a big rise in fixed-price holiday bookings as cash-strapped Europeans opt for risk-free deals in a volatile economic climate.

TUI Travel, Europe's largest tour operator, said summer bookings by Britons were up 9 percent and were 10 percent higher from the Nordic countries. “More people are booking all-inclusive holidays, which is very attractive at the moment, given the strengthening of the euro against the pound,” Peter Long, chief executive of TUI, which owns Thomson and First Choice, said yesterday. “Our leading position in the UK has further benefited from increased market share as a result of higher demand for our unique holidays. Across all our key markets demand for the overseas holiday remains strong, despite the overall economic environment. “We are confident that our customer focused strategy is driving performance and based on current trading we expect to be towards the top end of our roadmap guidance of 7 to 10% underlying operating profit growth for the 2013 financial year.” Thomas Cook confirmed the trend.

Bookings for summer 2013 from northern europe were up 17 percent on last year, with continental Europe also higher, the group said in a statement.
Chief Executive Harriet Green said the company had seen good demand for package holidays with Spain, Turkey and Greece proving to be popular destinations.

Travel firms and airlines across Europe have seen bookings fall over the last two years, hit by the euro zone debt crisis, high fuel costs and turmoil in Greece, one of the continent's main holiday destinations.

Thomas Cook, the world's oldest travel group, has issued a string of profit warnings and has been forced to renegotiate bank loans and make disposals to cut debt.

However, the 172-year-old firm said its turnaround plan was on track after it reported reduced first quarter operating losses and said it had cut costs and debts. “This quarter we delivered the first quarterly improvement in profits for two years,” said Thomas Cook's Green said.
Since travel industry outsider Green took over as CEO last May, the company has seen a steady improvement in its finances. “The new management team has made a solid start. The real test will come in future years, but in the meantime 2013 is likely to remain a honeymoon period for new management,” said Peel Hunt analyst Nick Batram.

Some analysts say austerity measures across Europe will hold back demand for leisure travel, with brokerage Morningstar expecting TUI's tour package revenues to remain flat over the next five years.

Direct distribution sales in the UK for summer 2013 grew to 90% from 89% with online sales accounting for 37%, up by 1% over the same period a year earlier.

Tui claims its accommodation wholesaler business “continues to build a global leadership position” with total transaction value up by 9% for this summer, driven by Latin America and Asia where TTV is up by 23%.

The group reported strong current trading with winter 2012/13 83% sold with higher margins and average selling prices in key source markets.