TUI Travel shares hit as holidaymakers hold back
Shares in Europe's biggest travel operator, TUI Travel, have fallen 10% after the Thomson Holidays owner said several factors had hit its UK trading.
These included airspace closures due to volcanic ash, good weather encouraging people to stay at home and uncertainty about the impact of government cuts.
As a result, booking volumes were about 10% lower in the three months to the end of June compared with last year.
This meant revenue fell to £3.4m, down from £3.6m a year ago.
"The strong booking trends experienced up until the volcanic ash disruption in mid-April and the subsequent rebound in early May were not sustained in the early summer period," said Peter Long, TUI's chief executive.
The UK was hit particularly hard.
"In the UK, the market has slowed markedly following the recurrence of airspace closures, the emergency budget and subsequent austerity measures, and the better than average UK weather, combined with quiet trading during the World Cup," the company said.
Bookings in the Netherlands were also lower than a year earlier, but those in other key European markets increased.
"The current trading position has marginally improved, although management remain understandably cautious for full year prospects," said Richard Hunter at Hargreaves Lansdown stockbrokers.
"The third quarter update follows on from a first half loss in May and, whilst this was somewhat expected given the seasonal nature of the industry, today's update does little to provide comfort."