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Tourism boon from trips to escape gloom

CONSUMERS trying to escape the economic gloom by taking last-minute breaks are set to help tour operators to post higher annual profits this week, but trading will stay tough.<br /><br />Thomas Cook and TUI Travel are likely to report relatively strong numbers today and Tuesday respectively, as appetite for holidays holds up despite late bookings.<br /><br />Cook is tipped to report pre-tax profits of &pound;310m, slightly up from last year&rsquo;s &pound;309m, while Thomson and First Choice parent TUI is set to post pre-tax profits of &pound;365m, against &pound;320m at the same time last year.<br /><br />&ldquo;We expect underlying earnings to be relatively resilient, with consumers continuing to attribute a high priority to holidays,&rdquo; analyst Sam Hart at broker Charles Stanley said.<br /><br />The downturn has hit demand for overseas breaks, but firms have cut routes and capacity.<br /><br />Shares in Thomas Cook and TUI have faced pressure recently, however, after analysts were downbeat about future earnings.<br /><br />Operators faced high costs, weak demand and growing difficulty in cutting capacity, broker Morgan Stanley said.<br /><br />There is also concern about rising debt, higher fuel costs, the weak pound making overseas trips dearer and challenges from low cost airlines.<br /><br />Analysts will look out for the firms&rsquo; views about the outlook amid fears that bookings&nbsp; are lagging previous years.<br /><br />They have also flagged up the possibility of comment on a cash call at Thomas Cook as it looks to refinance a &euro;1.1bn (&pound;1bn) bank facility.