March 12 (Reuters) - British package holiday provider On The Beach Group on Thursday temporarily suspended its annual profit outlook, citing a slowdown in holiday demand in destinations near the
UK's On the Beach suspends forecast as Iran war hits Mediterranean holiday demand
Impact of Middle East Conflict on On the Beach and Travel Industry
By Simone Lobo and Yadarisa Shabong
Profit Forecast Suspension and Market Reaction
March 12 (Reuters) - British package holiday group On the Beach suspended its profit forecast on Thursday, saying the U.S.-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 million and 43 million pounds ($52-$58 million) as a result of the developing Middle East crisis, sending its shares 10% lower.
Airlines Respond to Middle East Tensions
Global airlines have suspended flights to Middle Eastern countries like the UAE, Kuwait and Bahrain amid U.S. and Israeli strikes on Iran. British Airways has dropped all flights to and from Abu Dhabi until later this year.
Effect on Holiday Demand in Surrounding Regions
On the Beach said although it has limited exposure to the Middle East, demand for holidays in surrounding destinations had dropped since the U.S.-Israeli strikes on Iran late last month.
Company Response and Outlook
"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.
Financial Resilience and Future Prospects
On the Beach said it could not predict the shape of 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.
Analyst Commentary
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".
Currency Exchange Rate and Reporting Credits
($1 = 0.7472 pounds)
(Reporting by Simone Lobo and Yadarisa Shabong in Bengaluru; Editing by Sherry Jacob-Phillips and Alexander Smith)
