Summer bookings for TUI Travel holidays are up 4% on last year, despite fears better weather at home this year might have boosted staycations in the UK, according to the travel group which employs 850 staff in Scotland.

The buoyancy contrasted with gloom across the Channel, where French bookings slumped by 22% on the same period last year.

TUI, the world's largest tour operator, which owns the Thomson and First Choice brands, expects to grow profits by at least 10% this financial year as cash-strapped Europeans choose fixed-price holidays.

The value of UK bookings was also ahead of last year, by 7%. However, total bookings in its recent quarter were down 2%, hit by weakness in Germany which fell by 4% and notably in France.

Peter Long, the group's long-standing chief executive,said: "Consumer confidence in the UK is looking much more positive than it has ... and much better than in France, for example, which I think is likely to remain weak."

The UK and Germany both account for around one-third of TUI Travel's annual revenues while France and the Nordic region each account for roughly 10% of sales

TUI shares have risen by 20% in the past three months on hopes of more positive guidance, and they fell 5% yesterday, closing at 380.8p.

Traders attributed the fall to profit taking, with Panmure analyst Simon French blaming "an earnings upgrade which hasn't materialised".

TUI Travel, formed in 2007 through a merger between First Choice Holidays and the Thomson tourism unit of German group TUI said last year it expected to report compound annual profit growth of at least 7% over the next five years.

However, it raised expectations in May, saying it was experiencing its strongest summer booking season in six years.

The group, which owns six European airlines including Britain's Thomson Airways, posted an underlying operating profit of £76 million for the three months ended June, its fiscal third quarter.

It said 84% of its summer 2013 holidays were already sold, similar to the same period last year, with all-inclusive package holidays especially popular.

"Given our current position we remain very confident of achieving full year underlying operating profit growth of at least 10% on a constant currency basis," Mr Long told reporters. The company also said it had also made an encouraging start to the 2013/14 winter season, with 21% of its winter programme already sold.

Following the third-quarter figures, analysts expect the group to post a full-year operating profit of around £560m up from £490m the year before, according to a Reuters poll of four brokerages.

TUI Travel, whose quarterly revenues rose 5% to £3.86 billion, said 47% of its sales were now made online, up from 45% a year ago.

Mr Long said the group was "well positioned to continue to deliver our five-year growth roadmap".

Rival Thomas Cook last week reported its first third-quarter profit since staving off bankruptcy in 2011 and said it had sold 85% of its planned capacity for the summer 2013 season.