LONDON (Reuters) - Thomas Cook (TCG.L) is abandoning its raucous “Club 18-30” brand to target an image-conscious audience wanting more stylish holidays, the British tour operator said on Thursday.
Thomas Cook, set up in 1841 and a pioneer of package holidays, said demand for holidays in Turkey, Greece and Egypt would help it meet forecasts this year. Its airlines were also seeing strong demand, helped by the demise of rival carriers last year.
Looking to secure future growth, the company said it would launch up to 15 new hotels by next summer under the name “Cook’s Club”, a cheaper version of its up-market Casa Cook business, to attract style-conscious holidaymakers on a lower budget.
That move comes as it scraps its “Club 18-30” brand, a five decade-old brand synonymous with young Britons letting off steam on cheap, boozy holidays.
“Cook’s Club is really aimed at attracting a different audience to Thomas Cook,” Thomas Cook’s Chief Executive Peter Fankhauser told reporters.
“What we see is the clientele, they want to have fancy and cool pictures on Instagram.”
Shares in Thomas Cook, which have soared 27 percent over the last six months, traded down 3 percent to 141 pence after the results, which analysts put down to profit taking.
“First half progress and the summer outlook leaves full-year expectations well set. An element of ‘travel and arrive’ today perhaps, but we are enthused by the further upside potential on a 12 month view,” said Panmure Gordon analyst Mark Irvine-Fortescue.
Analysts are on average expecting Thomas Cook to post operating profit of 352 million pounds ($476 million) for the 12 month period to Sept. 30, which would represent a 7 percent rise on last year’s result.
The company said it would be able to meet expectations on a constant currency basis after taking action in its UK business, which is smaller in profit terms than its divisions in the Nordics and Germany, France and Belgium.
In order to shore up margins in its UK business, it said it had shifted capacity away from Spain and into cheaper destination Turkey, after hotels became more expensive in Spain and due to adverse currency moves.
This would mean that the size of the Turkish holiday market for its UK business would be back to the size that it was before 2015, Fankhauser said.
Turkey’s popularity as holiday destination plunged in 2016 over security concerns following a series of bombings and a failed coup.
Thomas Cook was also boosted in the first half of the year, by bookings at the group’s airline businesses rising 18 percent, as more customers flocked to it following the failure last year of rivals Monarch in the UK and Germany’s Air Berlin.
($1 = 0.7388 pounds)
Reporting by Sarah Young; Editing by Keith Weir