Views Article – Sharenet Wealth

Europe, Forex

Sterling slide knocks travel agent On The Beach outlook

(Adds details on warning, background)

Aug 9 (Reuters) – Online travel agent On The Beach Group Plc warned that its 2019 results would be hit by a sharp fall in the pound, which has led to an increase in the price of its packages.

On The Beach shares were down 18% to 365.6 pence at 0840 GMT as it said annual results would be below its own forecasts as higher prices made it tough to gain market share while maintaining margins.

The British-based company said it prices its packages dynamically rather than using a currency hedge, which reduces exposure to currency fluctuations.

“Whilst the group has seen a strengthening of demand in H2, this weakening of sterling leads to a significant increase in On The Beach prices versus full risk competitors with currency hedges,” the company said in a statement.

The pound hit to a two-year low against the euro on Thursday on uncertainties over the nature and course of a potential no-deal Brexit and subdued consumer sentiment. (Reporting by Yadarisa Shabong and Shashwat Awasthi in Bengaluru; Editing by Alexander Smith)

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