Sun seekers rush to book summer break

Tui Travel said there had been evidence of improved consumer demand in recent weeks with Britons using the economic dislocation as an opportunity to grab some sun.

Peter Long, chief executive, said Tui had seen a flurry of late bookings in the last four weeks and meant the group's heavily-cut programme for the winter season had been 90 per cent sold.

"It shows the high degree of importance customers put on a holiday," Mr Long said. "I think you're seeing the effect of low interest rates on disposable income, and the lower food and energy bills," he added.

The travel group also said trading for its critical summer season had improved since the start of February. Bookings in the UK in the last four weeks were down 7 per cent compared to a year ago, but narrowed compared to the 18 per cent reduction year-to-date.

In the Nordics region, bookings for the same period rose 2 per cent compared to a 20 per cent fall year-to-date. Germany, however, remained flat while France, which has seen bookings down 23 per cent year-to-date, saw bookings fall 25 per cent owing to political tension in the French West Indies.

Tui, formed from the merger of Germany's Tui and UK's First Choice in 2007, was forced to slash capacity by 16 per cent as the rapid economic downturn made holidaymakers reluctant to book their place in the sun.

UK customers were increasingly choosing destinations outside the Eurozone because of sterling weakness, the group said, with Egypt and Turkey popular destinations, up 18 per cent and 8 per cent respectively.

Bookings for all-inclusive holidays also rose 13 per cent in the quarter "as it gave people certainty over their budget," Mr Long said.

The demand, coupled with capacity cuts, enabled Tui to reduce its operating loss for the quarter. Revenue for the group to December 31 rose 9 per cent to £2.7bn while pre-tax losses narrowed from £140.4m to £88.6m. Underlying operating losses narrowed from £63.3m to £34.9m.

Tui shares opened up 3p at 239½p.

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