Tui Travel, majority owned by German company TUI AG, said on Thursday customers were picking Greece, Spain and Turkey and it had adjusted its programme accordingly, increasing the amount of holidays on sale to those regions.
TUI Travel, which owns First Choice and Thomson said it was too early to say when demand for Egypt and Tunisia would recover, adding it had cheap deals currently on offer for resorts such as Sharm El Sheikh.
"Recognising the importance of tourism in these countries, both hoteliers and tourist boards have been working with the industry on ways to encourage customers to return," chief executive Peter Long said.
Thomson is offering seven night all-inclusive holidays to Sharm El Sheikh from 499 pounds ($802) per person, about 400 pounds off the normal price.
TUI Travel reiterated guidance given in February that the unrest in Egypt and Tunisia could wipe up to 30 million pounds ($48 million) off profit after holidaymakers were advised to stay away from the region.
Long told Reuters earlier this week the group was factoring in an annual hit of up to 40 million pounds to profit from the impact of conflicts and natural disasters.
Tui Travel said on Thursday that, since its last update, trading had been in line with its expectations.
"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," said Long.
The group, whose key source markets are Britain, France and Germany, said it was increasing the amount of higher margin "differentiated product" it sells. This comprises holidays to resorts exclusive operated by TUI Travel.
"Having reshaped our programmes and in the light of recent geo-political events, we are pleased with our trading particularly for differentiated product where demand is high and which tend to achieve higher margins," Long said.
TUI Travel said its winter programmes were almost fully sold, with planned load factors achieved outside Egypt and Tunisia. It also said its jet fuel requirement was almost fully hedged for 2011.
Growth in Summer bookings in Britain has, however, to 2 percent from 8 percent as of January 16. On Tuesday, rival Thomas Cook said British bookings had slowed as government austerity measures bite.
TUI Travel shares, which had lost around 20 percent of their value since January, were up 1.6 percent to 233 pence at 10:10 a.m.
"Tour operators are on a bad run as far as outside events impacting their respective businesses is concerned. However, the update was reassuring and against a tough backdrop the company is performing well," said Peel Hunt analyst Nick Batram.
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