UK package holiday group On the Beach has suspended its profit forecast, saying the US-Israeli war with Iran has triggered a sharp slowdown in holiday bookings to destinations such as Turkey, Greece, Cyprus and Egypt.
On the Beach said it had temporarily suspended its annual adjusted pretax profit outlook of between £39-43m as a result of the developing Middle East crisis, sending its shares 10% lower.
Global airlines have suspended flights to Middle Eastern countries like the UAE, Kuwait and Bahrain amid US and Israeli strikes on Iran. British Airways has dropped all flights to and from Abu Dhabi until later this year.
On the Beach said although it has limited exposure to the Middle East, demand for holidays in surrounding destinations had dropped since the US-Israeli strikes on Iran late last month.
"Following the onset of the conflict in the Middle East, our operational teams have been working round the clock to support directly impacted customers in resort and to enable a return home as soon as possible," CEO Shaun Morton said in a statement.
The company did not provide further details.
On the Beach said it could not predict the shape of a recovery in demand for the destinations affected but its asset-light online model allows for lower fixed costs and it continues to trade profitably and generate cash despite the volatility.
Analysts at Peel Hunt said On the Beach's move was unsurprising and they expect the company to be "back on track after the Iran disruption concludes".
