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Slow Recovery Holds Back TUI Travel

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TUI Travel, Europe's biggest tour operator by revenue, reported a dip in the number of vacations sold for this summer, as the slow pace of economic recovery in much of the region offset a resurgence in the popularity of travel to Greece.

The owner of Thomson and First Choice said on Tuesday the number of customers for its mainstream summer vacations were down 2 percent on last year, with trading particularly tough in France and Nordic countries.

But that was offset by a rise in the average price of holidays sold and the group stuck to its target to grow underlying operating profit by 7-10 percent this financial year at constant exchange rates.

Chief executive Peter Long said TUI Travel had seen a "huge resurgence" in demand for vacations to Greece as the country stabilizes following its debt crisis and international bailout.

Spain's Balearic Islands and Canary Islands, as well as Turkey, were popular too, while further afield, Jamaica was also attracting more visitors, he added.

However, trading was tough in Nordic countries and in France, with a break-even in the latter country now more likely in 2016 than next year, Long said.

Bookings were also flat in Germany, TUI Travel's biggest market, as growth in package holiday sales was offset by a planned reduction in the number of airline seats sold separately from a tour package.

The company posted a first-half operating loss of GBP£298 million, worse than the GBP£289 million loss reported in the same period the year before due to the timing of Easter.

Like most tour operators and airlines, TUI makes losses over winter when fewer Europeans travel.

TUI Travel is 55 percent owned by German travel and tourism group TUI.

(Reuters)

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