Thomas Cook defies economic slump

Thomas Cook said people consider a holiday to be a "must have" item.

Thomas Cook says it has seen no evidence of consumers cutting back on holidays despite the economic slowdown.

The firm says trading has been robust this summer and bookings for winter and next summer are set to be strong.

Thomas Cook chief executive Manny Fontenla-Novoa said destinations outside the eurozone, such as Turkey and Egypt, had proved to be popular.

A strong euro has deterred many holidaymakers from visiting the 15 countries that use the currency.

Mr Fontenla-Novoa said that the firm found that customers considered an annual holiday a "must have" item.

"In our experience, people will cut back on all sorts of other things before they cut back on their holiday," he said.

"In the last six weeks of trading, our average price has gone up by 9%. Our all-inclusive holidays and our 4 and 5 star holidays are both up on last year by 10% and 13% respectively," he added.

However, holidaymakers planning to escape the poor summer weather should expect higher prices and fewer last-minute deals.

Thomas Cook said its moves to cut capacity had left it with 14% fewer holidays to sell than at this time last year, while average prices were up 14% in the past three months.