First Choice holidays take off

TOUR operator First Choice Holidays scotched talk of a consumer slowdown today with a big cut in first half losses and an upbeat assessment of prospects.

Chief executive Peter Long brushed off suggestions that the company might be hit by holidaymakers delaying their travel plans and declared that many people now see holidays as essential rather than optional.

The company cut losses by 15%, which was comfortably ahead of City predictions and a 'strong' level of forward bookings. Pre-tax losses of £34.1m were down from £39.9m and compared with analyst forecasts of a £36m loss.

Long said the figures represented the third successive year in which winter losses have been reduced and reflected well on the company's recovery programme.

He added: 'We believe that the annual holiday remains an extremely important purchase for our customers. When combined with the flexible business model we have built, and a market in which supply and demand looks to be better balanced than has historically been the case, this gives us confidence that we will meet our expectations this year.'

First Choice said bookings of mainstream holidays for the coming summer, as a percentage of the total number of holidays on offer, were up five points on the previous year, with customer numbers up 11%. Specialist holiday bookings, meanwhile, rose 33%. Total sales in the sector rose 21% as the company experienced particularly strong growth in higher-cost holidays.

First Choice has been attempting to drive sales of higher margin all-inclusive package holidays, such as action and adventure holidays while simultaneously cutting back on short-haul flight-only business, where competition verges on the cut-throat.

Last month the company said it had seen earlier bookings on the back of a boom in long-haul packages ? growth here has been helped by the weakness of the dollar which has helped many tourists switch from the traditional Mediterranean market to more exotic locations elsewhere.