A surge in demand for long-distance holidays gave investors in Crawley-based First Choice Holidays something to cheer about this week.

The tour operator said summer sales for its mainstream business were up seven per cent in the past five weeks, with rates of sale and margins "particularly strong".

The group, whose brands include Unijet, Falcon and Sovereign, said cumulative summer sales for its mainstream holidays were up four per cent on a year earlier.

This is despite a five per cent cut in capacity after First Choice limited its exposure in shorter haul sectors, where low-cost airlines have taken business.

But the company's increased focus on long haul destinations such as Florida and Mexico appears to have paid off, with sales up 35 per cent for the summer.

First Choice added its activity holidays sector and its online operation, including website Hotelopia, continued to perform well, with summer sales ahead by five per cent and 53 per cent respectively.

The integration of Grand Expedition, bought in December last year, and Intrav, acquired in January, into First Choice Marine is on track to realise £4.5 million of cost savings and benefits by October 2007.

Further savings are expected in 2008 and 2009 as Intrav, following the disposal of its two US coastal cruising ships, is restructured to focus on its premium escorted tours and expedition cruise businesses.

A "significant reduction" in Intrav's cost base had already been achieved, according to First Choice, and the business was now "well on the way to returning to profitability in 2007".

First Choice said it had recently completed four acquisitions in the North American student travel sector, which it identified as a "key growth area".

The group paid out £16 million for Chicago-based Educational Tours, the second largest company of its type in the US, and Canada-based School Voyageurs, Educa Tours and Jumpstreet Tours.

Among other developments, the company said its accommodation provider Hotelopia had continued to extend its strategic partnerships with airlines. Hotelopia recently won the contract to be the accommodation provider for Spanair and has now signed two further contracts with bmi and bmibaby.

Hotelopia is scheduled to start providing accommodation for the three airlines from next month.

The airlines have a combined customer base of close to 20 million passengers, who will be able to book accommodation at more than 20,000 hotels in more than 900 destinations through Hotelopia.

First Choice, based in London Road, employs more than 14,000 people in 17 different countries.

Tuesday, May 2, 2006