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Holidaymakers shrugging off the recession

Travel giant Thomas Cook today said holidaymakers were determined to take their summer break despite the recession as the firm posted better than expected results.

Bookings for next summer are currently on track and the firm expects "continued strong growth" from destinations such as Turkey and Egypt as customers shun Eurozone countries due to the weakness of the pound.

Chief executive Manny Fontenla-Novoa said: "Recent customer research shows that UK holidaymakers remain intent on taking their holidays abroad next summer."

Underlying pre-tax profits came in at £308.2 million for the year to September, broadly level with last year despite City predictions of a 3 per cent fall.

Mr Fontenla-Novoa said the results were "particularly pleasing" against the backdrop of recession and the swine flu outbreak, which cost it an estimated £8 million in the UK.

Thomas Cook carries around six million UK holidaymakers a year.

Despite customers booking later, the firm said winter bookings had "strengthened in our major markets".

The travel agent's average UK selling prices are up 6 per cent, mainly due to the pound's weakness against the euro and fuel costs - although it is looking to counter this by driving better deals with hoteliers as well as cutting capacity, which means it has to give away fewer trips at discount prices.

Thomas Cook has also cut its lower-margin short-haul capacity in favour of more medium-haul destinations to match demand for non-euro resorts. Selling prices for medium- and long-haul holidays are up 7 per cent overall.

Thomas Cook merged with the former Airtours business MyTravel in 2007 and said cost savings from the deal had been a higher-than- expected £215 million.

Thomson owner TUI also tied up with First Choice two years ago, before the recession struck, to combat declining package tour business due to competition from low-budget airlines.

Mr Fontenla-Novoa added: "I actually think that, had there been four (travel agents) going into this recession, one player and maybe two would have gone bust."