Far away places are luring travellers

Winter bookings are up 6.2% on last year, when many travellers stayed close to home because of the war in Iraq and an outbreak of the deadly Sars virus.

The travel slump hit earnings across the tourism industry, prompting a number of mergers and profit warnings.

TUI, owner of Lunn Polly and Thomson, has cut prices to lure tourists.

Pick up

Rival Thomas Cook on Wednesday also said that the outlook was improving.

The company, owned by German airline Lufthansa and retailer KarstadtQuelle, is offering lower prices to people who book early.

While cheaper trips had boosted reservations, it would probably take longer for earnings to rebound, the Thomas Cook said.

Sliding sales

Even though demand picked up at the start of summer and TUI's winter reservations were 6.2% higher than the same time last year, sales in the third quarter slid 4%.

The company, which used to be a steelmaker trading under the name Preussag and still owns a shipping business, is upbeat about its outlook, however.

TUI has cut jobs and sold subsidiaries to make it leaner and boost profit and says earnings will improve further in the fourth quarter.