Thomas Cook Group Plc, Europe’s second-largest tour operator, said business in Russia this year is better than planned, dismissing concerns the country’s annexation of the Crimea region may hurt the industry.
“Many Russians continue to travel the world with vigor and glee, and many people are traveling into Russia,” Chief Executive Officer Harriet Green said on a conference call today. Thomas Cook management is “hopeful that we will return to profitability at the end of this year” in the country.
Russian President Vladimir Putin’s move to annex Ukraine’s Crimea peninsula this month prompted the U.S. and European Union to impose financial sanctions on some individuals, leading investors to shift some assets abroad. Russia faces a growing risk of recession as a potential hemorrhaging of $100 billion in capital this year may bring the economy to a near standstill, according to analysts and government officials.
Thomas Cook is watching the situation closely in Russia “carefully,” though the market has undergone a “huge change,” with a steady flow of Chinese travelers into the country also supporting the industry.
Russia has been among the markets Green has devoted special management attention to since she took the helm at London-based Thomas Cook in 2012. Green said in February that while Russia was one of the travel operator’s few “sick businesses” remaining, it may recover soon.
Thomas Cook today said groupwide average selling prices for the ending winter season rose 1 percent, with bookings down 4 percent, as the company failed to fully offset fewer trips into Egypt, a favorite holiday destination among Russians and sun-seeking Europeans for the season, amid political unrest in the North African country.
Excluding Egypt, tour bookings rose 1 percent in local currencies. Reservations for the summer season are up 2 percent this year through March 15, the company said.