Leisure travel firm Club Mediterranee said European bookings fell in the past four weeks and warned profits at its resorts would miss expectations this year as the region's debt crisis meant fewer consumers planned summer holidays.
Club Med, which has recast itself as a higher-end holiday operator, reported higher first-half profits helped by demand for its up-market resorts and a good skiing season.
Club Med operates 75 resorts in 40 countries, ranging from Caribbean beach villages to Alpine ski locations.
"We have total confidence in the future of Club Med but we are cautious and watching closely the tourism situation in Europe," chief executive Henri Giscard d'Estaing told a news conference.
"The crisis in Europe makes a case for our strategy of global expansion to fast-growing countries," he added, citing China, Brazil and Russia.
Club Med also cut debt thanks to higher cash in the first half and if it continues to make progress on results for the year, it will be able to pay a dividend for 2012, he said.
With a market value of EUR€420 million (USD$529 million), the group competes with global hoteliers such as Intercontinental and Accor. It also competes with tour operators such as global leader TUI Travel and Thomas Cook.
EUROPEAN BOOKINGS HIT
Bookings over the past four weeks fell 2.7 percent in Europe, but rose 1.5 percent in America and 2.5 percent in Asia.
As of June 2, total summer bookings were still up 3.5 percent.
"The second half is looking more fragile with bookings in line with our forecasts but down slightly in recent weeks," one trader said.
Revenue in the first six months to April 30 rose 4.6 percent to EUR€798 million.
The winter season in France and Austria benefited from growing numbers of Brazilian clients tempted to try the Club Med resorts in Europe, Giscard d'Estaing said.
In France, business volume rose 5.3 percent during the winter season, outperforming a 4.2 percent decline in the national tourism market.
Austerity-hit Italy was a tough spot, and Club Med's business there fell 11 percent, though still beat a 22 percent national market slump.
Giscard d'Estaing said after the news conference that he had "no particular worry" over the Club Med operations in Greece, where the group owns two villages and has no debt.
"There is no particular plan," he said when asked if Club Med was drawing up contingency plans for Greece's possible euro zone exit.
The closely watched metric of operating income at holiday villages before depreciation, amortisation and provisions rose to 10.9 percent of sales from 10.7 percent a year ago.
Club Med cautioned that this ratio could be around 9 percent for the full-year given worsening European markets. It had earlier expected a margin above 9 percent of sales.