TUI has said unrest in the Middle East in recent months will cost it £25-£30 million.
Demand for trips to Egypt and Tunisia have been particularly hard hit, but both now represent “exceptional value” to travellers, according to the tour operator.
In a trading update for the six months to March 31st, TUI said deals reached with hoteliers and tourist boards in both countries had resulted in sharp price falls in order to encourage customers to return.
Peter Long, chief executive of TUI, commented: “Following the political events in Egypt and Tunisia our experience has been that customers continue to
want to go on holiday with us, albeit to alternative destinations.
“The flexibility we have in our business model has allowed us to actively re-shape our programmes across all our source markets to satisfy this demand and we have moved significant capacity to a number of other destinations including Spain, Greece and Turkey.
“We are also working closely with our suppliers in Egypt and Tunisia to ensure that the programmes which are on sale offer extremely good value for our customers.”
TUI also said a corner may now have been turned.
Governments in all source markets - except Russia - have now lifted advice not to travel to Tunisia and Egypt.
TUI has therefore re-commenced programmes, albeit with significantly lower capacities, having extensively re-shaped programmes across source markets.
“The overseas holiday remains a priority for our customers and the flexibility we have in our business model means that we have been able to react very quickly to the situation in Egypt and Tunisia,” added a TUI statement.
“The long term relationships we have with suppliers have allowed us to move capacity and increase our programmes in certain key destinations.
“Trading remains in line with our expectations and the re-shaping of our programmes together with progress in our turnaround plans will, we believe, offset the current anticipated second half impact in Egypt and Tunisia.”