Thomas Cook compounded gloom among Europe's travel operators on Thursday by warning it would miss its 2010 operating profit goal as economic conditions continued to worsen, sending its shares down as much as 7 percent. The group, in which insolvent German retailer Arcandor still holds a 53 percent stake, said it would fall short of its hopes of achieving operating profit of 480 million pounds in 2010.
Shares in Thomas Cook were down 4.6 percent to 219 pence at 1205 GMT, having earlier been as low as 214 pence. Travel companies around the world are struggling to cope with a drop in demand as consumers tighten their travel budgets. The United Nations' World Tourism Organisation (UNWTO) has said international tourism will decline by 4-6 percent this year.
On Wednesday, Europe's biggest tour operator TUI Travel, 53 percent owned by TUI AG, reported a 21 percent decline in winter bookings, overshadowing third-quarter earnings that were ahead of market expectations. On Tuesday, InterContinental Hotels, the world's biggest hotelier, said a recovery for the industry might be two years away.
Thomas Cook CEO Manny Fontenla-Novoa said the 2010 target had been set as an "aspiration" at the time of the group's formation prior to the economic downturn following a tie-up of Arcandor's travel unit and Britain's MyTravel in 2007. "That was put out there at the time we merged the businesses when there was no recession and the pound was much stronger against the euro and the dollar," he said in an interview.
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