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Summer market is slipping - but the outlook is hard to read

We can say with certainty that the market for this summer has turned down, though not yet by what degree. Anecdotal evidence suggests parts of April were dreadful. The Thomas Cook half-year figures yesterday and Tui Travel's this morning support this picture, while being far from a cause for despair.

Both groups are benefiting from their pan-European businesses - and German trading in particular - as the UK stutters. Both report half-year group revenue up year on year, broadly in line with UK inflation, and while Thomas Cook reported a £36 million increase in underlying losses to £166 million, Tui Travel posted a £15 million reduction in losses to £307 million - for a period of the year when losses are expected.

The UK market is contributing rather more than its share of the losses. At Thomas Cook, the underlying loss in the UK increased 36% year on year to £159 million of that group loss despite cost savings. At Tui Travel, the operating loss for the UK and Ireland rose 7% on a year ago to £173 million.

When it comes to the latest trading numbers, the picture is complicated by the additional bank holiday last month, the annual shifting of Easter, the ash cloud last April and so on.

But the year started better. UK trading at both companies was up in the first three months, with Tui Travel reporting bookings up 2% year on year in an interim update to late March compared with a 1% increase at Thomas Cook.

The latter now reports cumulative bookings for this summer flat, though with the average sales price up 4%. Tui Travel's summer bookings are also flat to May 1 with average price up 4% - level with the lower of the latest UK inflation rates (the Consumer Prices Index).

Cook notes "the need to cut margins to stimulate demand" in the UK, "so that while customers migrated to all-inclusive and differentiated product, this was often achieved at discounted rates".

Tui Travel reports all-inclusive bookings now 46% of its UK total (up from 43% last year) and an increase in customers taking shorter durations - seven-night durations up 6% and 10-11 nights up 24% to date on 2010.

The summer-trading story may turn again once the peaks and troughs of holiday periods are ironed out by the end of the season. But one trend is clear. Thomas Cook reports its controlled distribution in the UK up almost 6% year on year to 71.5% of total sales.

In Northern Europe, broadly Scandinavia, the company's controlled circulation was 84% and its underlying operating profit rose 13% - a better performance than anywhere else in the group, including booming Germany.

Thomas Cook no doubt intends to produce a similar effect in the UK through its merger with The Co-operative Travel and Midlands Co-op, now in the hands of the Competition Commission.

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This is getting a bit more subjective, but I much prefer the Zune Marketplace. The interface is colorful, has more flair, and some cool features like 'Mixview' that let you quickly see related albums, songs, or other users related to what you're listening to. Clicking on one of those will center on that item, and another set of "neighbors" will come into view, allowing you to navigate around exploring by similar artists, songs, or users. Speaking of users, the Zune "Social" is also great fun, letting you find others with shared tastes and becoming friends with them. You then can listen to a playlist created based on an amalgamation of what all your friends are listening to, which is also enjoyable. Those concerned with privacy will be relieved to know you can prevent the public from seeing your personal listening habits if you so choose.

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