Tour operator Thomas Cook warned its British business was likely to perform worse than last year after reporting an increased first half loss.
Europe's second-biggest travel firm said it faced tough market conditions and a difficult economic environment in the UK, as inflation, unemployment and expectations of higher interest rates hurt consumer sentiment.
The company said it had been offering holidays at discounted rates in order to stimulate demand.
Thomas Cook said it made an underlying operating loss of £166m in the six months to end March, compared with a £130m loss in the same period last year.
Market expectations had been for an operating loss of between £165 and £170m, according to a Thomson Reuters poll of five analysts.
Thomas Cook said the results reflected disruption resulting from the unrest in Egypt and Tunisia and the later timing of Easter, which fell in the second half this year.
Tour operators traditionally make a loss in the first half of the year, which does not include the key summer period.
"First half trading was impacted by the timing of Easter and the unrest in the MENA (Middle East and North Africa) region but despite the difficult UK trading environment in the first half, we have contained the seasonal loss," said chief executive Manny Fontenla-Novoa in a statement on Monday.
Thomas Cook said it estimated unrest in Egypt and Tunisia had cost it £22m during the period, with the later timing of Easter knocking around £15 million off its profit.
For summer 2011, Thomas Cook said trading in the UK continued to be tough and bookings were flat year-on-year.