Thomas Cook Demand Rises Despite Security Fears

Thomas Cook said demand for travel was ahead of last year, defying market worries that security concerns would dent European appetite for foreign travel.

Security fears were intensified by the attacks in Paris on November 13 which killed 130 people. Holidays from Britain to Tunisia had already been halted after the death of 38 tourists in a massacre on a beach in June.

Demand for holidays has strengthened, however, Thomas Cook said on Wednesday as it released annual results. Bookings from Britain were up 8 percent compared to the same time last year, and up 1 percent overall across its main markets in northern Europe.

With winter sun destinations Egypt and Tunisia out of the picture, holiday-makers were opting to go the Canary Islands, and on long-haul trips to North America, Mexico and Cape Verde, Thomas Cook chief executive Peter Fankhauser said.

"When customers want to travel they recognise the greater security that tour operators such as ourselves can offer," he told reporters.

For its last financial year to September 30, Thomas Cook reported a 4 percent drop in annual core earnings to GBP£310 million. It had already warned that cancellations of holidays to Tunisia would impact profit.

It confirmed that it was on track to grow core earnings (EBIT) by 13 percent to around GBP£350 million for the current financial year, signalling it will be able to weather the cost of Egyptian cancellations. It also reiterated its intention to pay a dividend the year after.

"The current trading picture is more robust than we expected and although it's early days post-Paris, they seem confident that the trading picture will continue," Shore Capital analyst Greg Johnson said.