Holiday groups fear drop in sales after tsunami disaster

Thomson Holidays and Thomas Cook, among the UK's biggest tour operators, yesterday said holiday bookings since Christmas had been slow as scenes of devastation in Asia had put people off holidays.

Thomson Holidays and Thomas Cook, among the UK's biggest tour operators, yesterday said holiday bookings since Christmas had been slow as scenes of devastation in Asia had put people off holidays.

The news from Thomson came as its parent company, the German-based TUI, was forced to repeat its profit targets amid fears that trading was poor.

Shares in TUI fell more than 2 per cent in Germany as rumours spread that a profits warning from TUI was imminent. But a spokeswoman for TUI later said: "We confirm our profit forecasts for 2004." The statement did little to lift sentiment, because the shares still closed 2.6 per cent down at €17.74.

The weeks after Christmas are normally a bumper period for tour operators as the time when customers traditionally make their summer holiday bookings. But the disaster in Asia has stalled many from buying. A spokeswoman for Thomson said: "The year has not got off to a great start as the period immediately after Christmas was slower than we expected.

"People have been seeing devastating images on their televisions, and that has inevitably knocked some people's confidence. But people are pretty resilient and bookings are starting to pick up strongly now. The Caribbean was wrecked by hurricanes last year, but that is proving very popular now."

Thomas Cook also said the past two weeks had been "definitely quieter" in booking terms. Several analysts are expecting bookings to have slumped immediately after Christmas. Mark Brumby, an analyst at Oriel Securities, said yesterday: "The tsunami must have stopped people booking in the short-term. People have been sitting on their hands and the figures will look pretty soft for this period."

Although holidaymakers are tending to leave booking their breaks until later, January is still considered an important month for tour operators. Mark Reed of Teather & Greenwood said: "It is had a slow start to the year, but we are still very early on and there is no reason to believe the situation will not recover."

Some travel groups , including Cathay Pacific and Kuoni, are have pulled advertising campaigns that were promoting the disaster-struck areas, as a matter of decency.