Staycation Brits cause a slump in hols on the Med

FAMILIES are staying at home to enjoy the hot weather rather than booking a summer holiday on the Continent, travel firm Tui has said.

Boss Friedrich Joussen said that the heatwave is likely to have triggered a fall in trips to Spain and other Mediterranean countries as customers bask in the British sunshine.

But he added that Turkey and North African nations such as Tunisia are regaining some popularity after a sluggish few years following terror attacks and political coup attempts.

This is likely to have been helped by the Turkish lira’s plunge to record lows, with the pound up 51pc against it in the past year.

Analysts warned that this currency turmoil would also hit Tui, formerly known as Thomson, with exchange rate changes likely to cost the business £31m this year.

It came as the company unveiled a 12.7pc fall in profits to £174m for the three months to June 30.

Joussen said summer bookings are likely to have been affected by the heat. He said: ‘I’m a little bit of a cautious man, and I know from history that if the weather is so hot, people say, “Maybe I will save the money for the next winter vacation”.’

The company also suffered an £11.7m hit from disruption to flights, mostly caused by air traffic control strikes in France. But it also enjoyed solid growth at its 380 hotels and fleet of 16 cruise ships.

The firm is spending heavily on new resorts in the Caribbean and South East Asia in a bid to ensnare more tourists from the US and China.

Joussen said that the two regions probably account for £8 in every £10 of hotel investment as Tui ramps up to prepare for increased demand. More and more Americans have passports and millions of them are within three hours’ flight of the Caribbean islands, he said.

In China, the country’s everricher middle classes offer an even bigger opportunity.

More than half of all visitors to Tui’s resorts in the Maldives and similar areas are Asian, and the majority of those are Chinese.

Joussen said: ‘At a certain moment in time, China will be to South East Asia what the US is to the Caribbean. We see the vision already happening today.’

Investors were worried by the drop in profit and sold Tui shares yesterday, sending the stock down 2.5pc, or 40p, to 1542p and wiping more than £200m off the value of the business.

Russ Mould, an analyst at investment firm AJ Bell, said: ‘The package holidays part of the business, particularly the UK component, has underperformed – almost certainly due to the World Cup and recent heatwave.’