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Thomson owner cites demand among UK customers for luxury holidays

Thomson owner TUI Travel said its UK customers were paying more for their holidays this summer as it rolls out luxury and all-inclusive deals.

The 5% rise in average prices helped the company offset a 3% year-on-year drop in bookings amid tougher comparisons with strong trading last year.

Chief executive Peter Long said TUI, which also owns First Choice, was pleased with summer trading, with 60% of the programme now sold.

TUI reported an operating loss down 3% at £315 million in the six months to the end of March, despite Easter falling outside the first half this year.

The company, which principally sells packages to customers in the UK, Germany, France and the Nordics, had said in March its operating loss would be flat for the period.

The rise in the average cost of its holidays in the UK came as the company offered more higher margin "unique" holidays and moved to offset rising costs.

TUI said it had laid on more holidays for Britons going to Greece, Ibiza and Lanzarote than a year ago due to increased demand.

It continues to expand its best performing "unique" brands, such as Sensatori, which recently opened a new resort in Jamaica and will be opening a further two resorts in Ibiza and Turkey next summer.

The business said overall its winter holiday bookings were typically down 6%, though prices rose 2%. Egypt remained TUI's worst affected region due to the country's ongoing political unrest.

The business reiterated its full-year operating performance guidance for growth of between 7% and 10%.

TUI Travel chief executive Peter Long said: "Overall, we are pleased with summer 2014 trading, against strong comparatives, and we remain confident of delivering 7% to 10% growth in underlying operating profit during the year."

The business said it was seeing margin improvement in Germany and was working to cut losses in the French market.

TUI added: "The UK continues to be the clear market leader, with further growth in profitability expected this year."

Like most tour operators and airlines, TUI generally reports a loss in the traditionally weaker first part of the year and makes the bulk of its profits in the summer months when its European customer base take more holidays.

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