TUI said political unrest in the Middle East and North Africa was still putting customers off vacationing in the region.
The group, which operates the Thomson and First Choice chains, cut the amount of holidays it sold to Egypt and Tunisia this summer and increased holidays on sale to alternative destinations such as Spain, Greece and Turkey.
“We are anticipating a slow recovery in trading to Egypt and Tunisia and have managed our capacity accordingly,” chief executive Peter Long said. Numis analyst Wyn Ellis downgraded the stock to “hold” from “add” and cut his price target to 160p from 180p, flagging concerns over rising fuel prices, Middle East and North Africa unrest and macro-economic concerns.
But TUI said its full year results would be in line with expectations following strong late demand for summer holidays. It said the summer season had traded well with bookings up across most of its markets.
“We are pleased with our performance in the lates market for summer 2011 and most of our programmes are now almost fully sold.
“We remain confident that the full year results will be in line with our expectations,” Long said.
The group added that trading for winter 2011-12 had been satisfactory overall.