Britons head to beach instead of royal wedding

The tour operator Thomas Cook has seen holiday bookings for April surge by a quarter from Britons looking to go abroad at around the time of the royal wedding to take advantage of a glut of bank holidays.

But Thomas Cook will take a £20m hit to profits from the political unrest in Tunisia and Egypt in its second quarter, after its bigger rival, TUI Travel, warned last week that it could lose up to £30m from the disruption.

For the three months to 31 December, Thomas Cook improved its underlying losses by 10 per cent to £37.3m. Manny Fontenla-Novoa, the chief executive, said the company had increased its capacity for the UK market from 200,000 to 300,000 in April and reservations were already up by 25 per cent on last year.

He explained that customers were finding it "too good to resist" booking a holiday in the second half of the month, when taking three days' holiday would give them 11 days off. Following the four-day Easter bank holiday, the royal wedding of Prince William and Kate Middleton falls on 29 April, ahead of the three-day May Day weekend. "We are seeing demand for holidays increasing significantly in April," said Mr Fontenla-Novoa.

For its first quarter, Thomas Cook's revenues rose by 7 per cent to £1.81bn, driven by strong demand for all-inclusive and luxury holidays. It said its bookings for this summer were "strong" and ahead of planned capacity rises of 3 per cent, with average selling prices up 5 per cent. Mr Fontenla-Novoa said: "Right now, 55 per cent of what we sell is all-inclusive... and 50 per cent is four-to-five star [holidays]."

However, while the "the economic environment continues to support demand throughout Continental Europe", he warned the recovery in the UK remains "very fragile".

Despite the Foreign Office still advising people to travel to Egypt's Red Sea resorts, Thomas Cook has seen a shift to other regions, with bookings to the Balearic Islands up by 30 per cent over the past four weeks, and sales to Greece 20 per cent higher.

But Mr Fontenla-Novoa said "conditions are calming down" in Egypt and the company hoped to return to a full programme by early April at the latest, and before then for Tunisia.

Meanwhile, he said he was "very confident" that the Office of Fair Trading would approve the merger between Thomas Cook and the Co-operative Group's high-street travel agent and foreign exchange businesses, which was first announced in October.