Impact of credit crunch?

Saturday, Oct 11 2008 by

It will be interesting to see what the impact of the current crisis will be on Thomas Cook's operational trading performance. Clearly, on the one hand, UK discretionary spending will come under major pressure but, to counteract that, I can see 2 effects:

1) Supply capacity is coming out of the market following the collapse of XL Leisure -

2) Indications are that holidaymakers were switching to package holidays in order to be financially protected in the event of a failure -


"Holidaymakers are returning to traditional booking methods and visiting travel agencies again because they believe they offer more security during the economic crisis... The move back to travel agencies is significant. In the past two years, TUI and Thomas Cook, Britain’s two largest operators, have between them shut 250 shops".

Unlock this article instantly by logging into your account

Don’t have an account? Register for free and we’ll get out your way


As per our Terms of Use, Stockopedia is a financial news & data site, discussion forum and content aggregator. Our site should be used for educational & informational purposes only. We do not provide investment advice, recommendations or views as to whether an investment or strategy is suited to the investment needs of a specific individual. You should make your own decisions and seek independent professional advice before doing so. Remember: Shares can go down as well as up. Past performance is not a guide to future performance & investors may not get back the amount invested. ?>

Do you like this Post?
0 thumbs up
0 thumbs down
Share this post with friends

Thomas Cook Group plc is a holiday company. The Company's segments are United Kingdom, Continental Europe, Northern Europe and Airlines Germany. Its hotels and resort brands include Sentido, Sunprime, Sunwing, Sunconnect, Smartline and Casa Cook. It has airline operations in Belgium, Scandinavia and the United Kingdom. It has a fleet of over 90 aircraft under the Thomas Cook Airlines and Condor brands. It operates from approximately 20 source markets in Europe and China. Its Sentido brand has operations in Germany, Austria, Switzerland, Belgium, Hungary, Poland, Netherlands and Czech Republic. Its Smartline brand has operations in Germany, Austria, Switzerland, Belgium, Hungary, Poland, Netherlands and Czech Republic. Its Thomas Cook brand has operations in Germany, Austria, Switzerland, Belgium, Hungary, Poland and Netherlands. Its Sunprime Hotels brand has operations in Germany, Austria and Switzerland. Its Neckermann brand has operations in Germany and Austria, among others. more »

LSE Price
Mkt Cap (£m)
P/E (fwd)
Yield (fwd)

  Is LON:TCG fundamentally strong or weak? Find out More »

2 Posts on this Thread show/hide all

Murakami 11th Oct '08 1 of 2

Interesting article on that theme here actually -

It also raises the question about fuel costs and the threats that this poses to Thomas Cook and TUI, although it argues that this will be less of an issue - "While fuel accounted for about 50 per cent of XL’s costs, thanks to its high proportion of flight-only business, it represents an estimated 15 per cent of the big two’s costs". 

| Link | Share
Murakami 11th Oct '08 2 of 2

Another potentially negative factor could be the shift in consumer preferences back towards domestic tourism. I don't know the split for Thomas Cook but I would assume that they are much geared towards international travel.

This article is interesting, suggesting that it will be a record year for domestic tourism:

“People will still want to go on holiday, but they are likely to take short breaks closer to home, as and when they can afford it. It will be a case of 'pack up the car and go'."

| Link | Share

Please subscribe to submit a comment

Stock Picking Tutorial Centre

Let’s get you setup so you get the most out of our service
Done, Let's add some stocks
Brilliant - You've created a folio! Now let's add some stocks to it.

  • Apple (AAPL)

  • Shell (RDSA)

  • Twitter (TWTR)

  • Volkswagon AG (VOK)

  • McDonalds (MCD)

  • Vodafone (VOD)

  • Barratt Homes (BDEV)

  • Microsoft (MSFT)

  • Tesco (TSCO)
Save and show me my analysis