TUI looking to be the popular attraction

Merger savings and the turnaround of underperforming businesses helped the group to achieve an 11 per cent increase in underlying operating profits to 447m for the year to September 30.

TUI is hoping to boost UK sales by offering British customers popular resorts such as Sensatori in Tenerife, which is unique to its Thomson Holidays brand in the UK.

TUI's chief executive Peter Long said the group had seen a sustained improvement in demand since July and trading for winter 2010/11 and summer 2011 is positive, although he remained cautious about the outlook for next year.

"Whilst current booking activity is good, driven by demand for our differentiated products, we remain cautious about 2011, given the continued economic uncertainty and the relatively early stage of the boo king cycle," he said.

The group's figures were helped by a 75m boost from merger savings realised during the year, reduced losses in Canada and a 20m benefit from a partnership with Air Berlin in Germany.

Those factors helped offset a weaker trading performance in Britain, where bookings were hit by disruption from the volcanic ash cloud in April and a downturn in consumer confidence in response to the Government's austerity measures.

The soccer World Cup and good weather also encouraged holidaymakers to stay at home.

TUI said demand in the UK for activity-led holidays such as biking and sailing has lifted bookings for next summer.

The group said bookings for its "differentiated" product range – holidays available only through TUI which include sporting breaks – are up 26 per cent in summer 2011, leading to a seven per cent rise in total UK summer bookings, when compared to the same period last year.

The company said advanced bookings were also driven by demand for more flexible holiday dates with nine to 12-night stays proving popular.