Tui has revealed a 10% drop in UK summer bookings as consumers hesitate to make bookings and switch destinations, while the holiday firm took a 61 million euro (£39 million) hit from the Iran war and hurricanes in Jamaica.

Europe’s largest travel operator is one of several firms to be impacted by the conflict in the Middle East, which began at the end of February.

It said booked revenues for summer were down 7% compared with 2025 for its tours and airline, falling to 10% for the UK market alone.

The US and Israel’s war with Iran has led to a shift in demand from eastern to western Mediterranean destinations, while customers were displaying greater caution and making bookings closer to departure dates, Tui said.

The company also pointed to a “competitive” market for travel.

Nevertheless, Tui said it was expecting Spain, including the Balearics and the Canary Islands, and Greece to be top destinations over the summer.

The German business revealed last month that the Iran war cost it around 40 million euros (£34.7 million) after it was forced to repatriate around 5,000 passengers from two cruise ships anchored in ports in Abu Dhabi.

Tui said on Wednesday that the cruise ships had now departed safely, during a pause in the hostilities, and will commence their summer season itineraries in the Mediterranean from mid-May.

It also said it took a roughly 21 million euro (£18 million) hit during the first half of the financial year from the impact of hurricanes that swept across Jamaica in October last year.

Tui reported an underlying loss before interest and tax, and at constant currencies, of 111 million euros (£96 million) for the first half – an improvement on the 156 million euro (£135 million) loss reported the year before.

It is on track to deliver a full-year operating profit of between 1.1 and 1.4 billion euros, down from previous targets of roughly between 1.5 and 1.6 billion euros.

Sebastian Ebel, Tui’s chief executive, said: “The very strong results give us confidence for the second half of the year.

“Due to geopolitical challenges and dynamic market conditions, it will require great dedication and flexibility.

“We offer our customers a high level of security and quality, especially in turbulent times.

“Package holidays remain the gold standard.”

Asian markets traded mixed on Wednesday as fading momentum in artificial intelligence-linked stocks, elevated oil prices and concerns over persistent inflation kept investors cautious.Japan’s Nikkei 225 edged up less than 0.1% to 62,774.94, while South Korea’s Kospi gained 0.9% to 7,708.05 after recovering some recent losses.Australia’s S&P/ASX 200 slipped 0.3% to 8,645.80.Hong Kong’s Hang Seng Index fell 0.4% to 26,246.29, while China’s Shanghai Composite was little changed, down less than 0.1% at 4,213.86.As per Reuters, MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.6% for a second straight session, as markets reacted to stalled US-Iran talks and hotter-than-expected US inflation data.

AI stocks under pressure

South Korean markets remained volatile after a recent AI-driven rally pushed stocks to record highs. Korean shares had earlier dropped as much as 3.2% before recovering.Shares of Samsung Electronics plunged 5.7% after the company failed to reach a wage agreement with its labour union, raising the possibility of a strike involving more than 50,000 workers that could affect chip production.On Wall Street, major US indices ended lower overnight, with technology stocks leading declines.The S&P 500 slipped 0.2% from its record high, while the Nasdaq Composite fell 0.7%, AP reported. Intel dropped 6.8% after a strong rally earlier this year, while Micron Technology lost 3.6%.“Corporate earnings and AI momentum are acting as the market’s primary shock absorbers, but the road is getting significantly rougher,” Tim Waterer, chief market analyst at KCM Trade, told AP.“With oil prices becoming entrenched at elevated levels and a diplomatic breakthrough between the US and Iran remaining elusive, the easy bullish narrative is becoming much harder to maintain.”

Oil prices remain elevated amid Iran tensions

Oil prices eased slightly on Wednesday but remained near multi-month highs due to ongoing tensions in the Middle East and continued disruptions around the Strait of Hormuz.Benchmark US crude fell 58 cents to $101.60 a barrel, while Brent crude slipped 66 cents to $107.11.Oil has largely remained above $100 per barrel since US and Israeli strikes on Iran earlier this year and Tehran’s effective closure of the Strait of Hormuz disrupted global supply flows.The fragile ceasefire between the US and Iran has also failed to reassure investors, with US President Donald Trump saying on Tuesday that he does not believe China’s help is necessary to end the conflict ahead of his meeting with Chinese President Xi Jinping later this week.“We’ve seen this movie before, and we know it doesn’t end with a breakthrough agreement that resets the US-China relationship,” Phillip Wool of Rayliant Investment Research told Reuters.

Inflation fears dampen rate cut hopes

Investors also reacted to stronger-than-expected US inflation data, which reinforced expectations that the Federal Reserve may keep interest rates elevated for longer.“A hotter-than-expected inflation report and persistent geopolitical tensions reminded investors that sticky prices and elevated energy costs are not going away anytime soon,” IG analyst Tony Sycamore told Reuters.Markets have largely ruled out any Federal Reserve rate cuts this year, while expectations for a rate hike by December have risen sharply, according to CME FedWatch data.US Treasury yields remained elevated, with the benchmark 10-year Treasury yield holding near 4.47%, its highest level since July.In currency markets, the US dollar strengthened slightly against the Japanese yen to 157.77, while gold edged 0.1% higher and bitcoin slipped marginally.

The State Bank of Pakistan (SBP) said on Wednesday it had received about $1.3 billion from the International Monetary Fund (IMF) under its Extended Fund Facility (EFF) and Resilience and Sustainability Facility (RSF) programmes, in a post on X.

The post read that, “The IMF Executive Board completed third review under the Extended Fund Facility (EFF) in its meeting held on May 8, 2026, and approved the disbursement of SDR 760 million for Pakistan”.

“Furthermore, the IMF Executive Board has also approved the disbursement of the second tranche of SDR 154 million under the RSF,” it added.

“Accordingly, SBP has received SDR 914 million (equivalent to about US$ 1.3 billion) under the EFF and RSF in value May 12, 2026, from the IMF,” SBP added in a statement.

The central bank said that “the amount would be reflected in SBP’s foreign exchange reserves for the week ending on May 15, 2026”.

Read: Petroleum levy jumps 45% to Rs1.2tr

On Friday, the executive board of the IMF approved $1.2 billion worth of loan tranches after Pakistan accepted a dozen new conditions and assured it would stick to the pre-war programme targets to stay on the course of stabilisation.

With the fresh approval, Pakistan has so far received a $4.5 billion loan from the IMF against two separate debt packages totaling $8.4 billion. Pakistan has access to another $1 billion under the Extended Fund Facility and $200 million under the Resilience and Sustainability Facility.

The money would be disbursed early next week, which will take the central bank’s reserves to over $17 billion, said government officials.

However, the government had to stick to the old fiscal and monetary targets and gave a commitment to stay on the path of stabilisation despite strong voices against these policies that have caused higher unemployment, higher poverty, and higher income inequality.