The online travel agent has scrapped its profit guidance for the forthcoming year after warning that conflict has sparked a sharp slowdown in bookings to Turkey, Greece, Cyprus and Egypt
On the Beach says bookings to countries including Turkey and Cyprus have fallen(Image: PA)
On the Beach has scrapped its guidance for the coming year after cautioning that Middle Eastern tensions have triggered a marked decline in bookings.
The online travel agent had previously projected pre-tax profit of between £39m and £43m.
“Whilst the group has limited exposure to destinations in the Middle East, it has experienced a significant slowdown in demand following the onset of conflict in the region, particularly to destinations such as Turkey, Greece, Cyprus and Egypt,” the Manchester-based firm said.
“The timing of when the conflict will end and the shape of recovery in demand to these destinations are unknown.”
On the Beach has been “working round the clock to support directly impacted customers in resort and to enable a return home as soon as possible,” chief executive Shaun Morton said.
Shares in On the Beach plummeted as much as 14.5 per cent to 165p on Thursday morning, though recovered a little later. The stock has dropped by more than a quarter since the beginning of the year, as reported by City AM.
The development adds On the Beach to an expanding roster of London-listed travel firms that have endured steep share price falls following the eruption of conflict in Iran.
Budget carrier Easyjet has witnessed its shares tumble by a fifth over the past month, whilst package tour operator Jet2 has declined by 11 per cent.
Oil prices surged back above triple figures on Thursday morning, climbing as much as nine per cent in Asian markets following reports that two tankers were hit in the Gulf. An Iraqi news agency reported that 38 crew members have been rescued from the vessels whilst one person has perished.
This follows Iran’s pledge to block “one litre of oil” from leaving the region until the strikes from the US and Israel cease. The Israeli military confirmed it had conducted an “extensive” wave of air strikes targeting Tehran overnight.
The International Energy Agency (IEA) intervened on Wednesday to stabilise oil prices through the release of a record 400 million barrels from emergency oil reserves in an attempt to contain surging prices on Wednesday – though market response remained subdued.
The IEA’s executive director Faith Birol stated on Wednesday the market “challenges we are facing are unprecedented in scale”.
Yet Brent crude – the international benchmark for oil – scarcely responded to the measure, remaining steady above the $90 threshold. Meanwhile, the FTSE 100 reversed to a decline, dropping 0.5 per cent during the day’s trading.
Analysts at investment bank Macquarie have suggested the continuing tensions surrounding the Strait of Hormuz could drive the price of Brent crude to “$150 or higher”.
“The timeline for an extremely large oil price move is very short,” they stated, noting that several weeks of closure for the strait – through which approximately a fifth of the world’s oil supply passes – would trigger a “domino effect”.
Bookings on the up Prior to the latest upheaval, On the Beach recorded a 10 per cent rise in bookings during the six months ending February, with reservations from returning customers climbing 19 per cent.
The firm noted that an increasing number of users are arranging holidays via their mobile devices, with a 58 per cent surge in bookings made directly through the app.
On the Beach is also anticipating revenue from AI chat tools, having recently submitted its app to ChatGPT.
