TUI Travel, the largest tour operator in Europe, anticipates to meet profit expectations this year, even though the number of holidaymakers booking breaks has declined due to a forced price increase and cut in capacity. Peter Long, the Chief Executive of TUI Travel, has admitted that the business has seen demand for holidays flatten. However, he said that the decision to cut back on the number of offered holidays has left them in a good position.

In the United Kingdom, the volume for charter holidays that were booked for the winter season dropped by 12%, but the average price that the holidays sold for had increased by 10%, which led to only a 3% drop in sales revenues. TUI Travel said, however, that a 9% cut in capacity for the United Kingdom means that the profit margins were in line with 2008.

They say that even though the trading environment is currently challenging and they expect flatter bookings, they are hitting profit-margin expectations. They also said that they see this trend will continue through the summer, with bookings picking up during the last 4 weeks following a slow Christmas. TUI Travel is also looking to reduce capacity for the summer season even more aggressively in order to preserve profit margins.

Long says that his main concern is of the future volatility of the price of fuel, as well as how the pound moves against the dollar and euro. The company said that they anticipate to gain from the falling price of oil more than anything for this financial year, which is to end September 2010.

Learn more about the travel operator at: www.tuitravelplc.com