Shares in Thomas Cook have fallen by nearly ten per cent this morning after the travel firm reported a drop in profits at its UK business.
Earnings at its UK division fell by 40 per cent in the year to September 30th, standing at £52 million.
Rising hotel prices, the fall in the value of the pound, and competition in the Spanish market all affected the holiday firm, according to its full year financial report.
Thomas Cook saw costs rise because of a spate of fraudulent illness claims and the help it offered customers caught up in Hurricane Irma.
Despite the weak performance at its UK division, underlying earnings across the Thomas Cook group as a whole rose by £24 million to £330 million, helped by a recovery at its German airline Condor.
“This year was a milestone year in the strategic development of Thomas Cook.
“By delivering what we promised on strategy, we’ve inspired more customers to choose our holidays for their hard-earned weeks in the sun, while at the same time transforming the scale of the opportunity ahead for the group,” said Thomas Cook chief executive Peter Fankhauser.
“We now see that the deliberate decision we made to put the customer back at the heart of our business is bearing fruit.
“Customers’ satisfaction with our holidays has increased strongly for a second consecutive year, growing in all of our main markets.
“I’m particularly pleased by the number of new customers we’ve won this year, showing us that we’re getting more people to look again at what we offer – and that more of our existing customers are recommending our holidays to family and friends.”
Thomas Cook, like rivals, was forced to seek greater capacity in Spain this year because terrorism fears had knocked demand in its key growth markets of Egypt and Turkey.
Fankhauser continued: “The actions we have taken in the last 12 months take us significantly further forward in our strategy for profitable growth.
“The strategic alliance we signed with Expedia will transform the way we work, enabling us to offer a much greater choice of hotels to Thomas Cook customers at lower cost and complexity to us.
“Meanwhile, the partnership with LMEY strengthens our own-brand hotel portfolio and reinforces our focus on a more streamlined portfolio of hotels where we can give customers the very best experience.”