The holiday giant revealed that while demand from British sun-seekers was robust over the summer, with bookings up 1%, sales were hit hard in Germany and across Continental Europe, tumbling by 9%.
It said bookings were also “significantly down” in Belgium after the terrorist attacks at Brussels airport in March.
But stripping out the impact of sharply lower demand for trips to previously popular destination Turkey, it said bookings surged by 13% over the summer in the UK and were 8% higher overall.
Chief executive Peter Fankhauser insisted travellers still wanted to holiday overseas, but have switched to destinations such as the Balearic and Canary Islands and the United States, alongside smaller destinations like Bulgaria and Cuba.
He said: “Customers’ desire to go abroad on holiday has remained strong, with the exception of Turkey where demand continues to be volatile.”
Thomas Cook cut its annual earnings outlook in July as it warned over the impact of the terrorist incidents.
The travel industry has been knocked hard by a string of terrorist attacks in Turkey, Belgium, and Paris and Nice in France, while the Brexit vote and plunging pound have also taken a toll.
The owner of UK airline Monarch revealed on Monday that it is in talks over a potential takeover of the carrier and is preparing to throw it a multimillion-pound lifeline.
This comes after Low Cost Holidays collapsed earlier this year, affecting more than 140,000 customers.
In its latest update, Thomas Cook said prices of UK summer bookings were 5% lower over the summer as it sold more “seat-only” flight deals alongside its package holidays.
The group said summer bookings dropped 6% in Germany, although it said it fared better than the wider weak tour operator market.
Holiday bookings over the winter season have followed a similar pattern, with strong demand from the UK being offset by a weaker performance across Europe.
The group said its winter season was 27% sold so far, which is in line with a year earlier, with UK bookings up 8% and ongoing weak demand in Germany and Belgium.
But customers are booking already for next summer to snap up the best deals, with bookings ahead across all its markets and prices also higher, it said.