On the Beach's Profit Forecast Scrapped: Fear, Not Facts, Hit UK Travel Stocks

The booking forms sit empty. On the Beach, the Manchester-headquartered online travel agent, has scrapped its £39m-£43m annual profit forecast after watching British holidaymakers abandon plans for Turkey, Greece, Cyprus and Egypt. The problem isn't bombs falling on Bodrum or missiles striking Mykonos — the problem is Iran, more than 2,000 miles from Santorini's whitewashed cliffs.

Chief executive Shaun Morton told investors Thursday morning that the company had seen a 'significant slowdown in demand' to Mediterranean destinations following the escalation of Middle East conflict. On the Beach shares fell 14.5 per cent to 165p, extending year-to-date losses beyond 25 per cent. The stock is now trading at levels last seen during the depths of pandemic uncertainty.

What's particularly striking here is the disconnect between actual risk and perceived threat. None of the destinations suffering booking collapses sit anywhere near active conflict zones. Yet British consumers are treating a holiday in Cyprus — 800 miles from Tehran — as somehow riskier than it was a fortnight ago.

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The geography of fear, as it turns out, doesn't follow latitude and longitude.

When perception becomes reality for UK travel stocks

On the Beach's withdrawal joins a broader rout across London-listed travel companies. EasyJet has shed a fifth of its value over the past month, whilst Jet2 is down 11 per cent. This isn't company-specific weakness — the entire sector is repricing for a summer that might not materialise.

Timing amplifies the damage. Peak summer booking season typically runs through spring, when families lock in July and August holidays and travel companies secure the revenue that funds their annual operations. According to On the Beach's most recent trading update covering the six months to February's end, bookings had been running 10 per cent ahead year-on-year, with repeat customers up 19 per cent. That momentum has evaporated.

The company has been 'working round the clock' to repatriate customers caught in resorts, Morton said, though On the Beach maintains limited direct exposure to Middle East destinations. The indirect exposure, however, is proving far more damaging than anyone modelled.

Oil prices refuse to cooperate with central banks

Behind the booking collapse sits a crude oil market that appears impervious to traditional interventions. The International Energy Agency announced Wednesday it would release a record 400 million barrels from emergency reserves — the largest strategic petroleum release in the agency's history. Executive director Fatih Birol described market challenges as 'unprecedented in scale'.

Brent crude barely moved. The international benchmark held firm above $90 per barrel despite the IEA's attempts to flood supply. By Thursday morning, following reports that two tankers had been struck in the Gulf, oil jumped as much as 9 per cent in Asian trading. An Iraqi news agency reported 38 crew members rescued from the vessels, with one confirmed casualty.

Iranian officials have reportedly vowed to prevent 'one litre of oil' leaving the region until strikes from the US and Israel cease. The Israeli military claimed overnight it had launched an 'extensive' wave of air strikes targeting Tehran, though such operational claims remain difficult to verify independently.

The timeline for an extremely large oil price move is very short, with even a few weeks of strait disruption triggering what analysts describe as a 'domino effect' across energy markets.

Analysts at Macquarie have modelled a worst-case scenario in which Brent crude reaches '$150 or higher' if the Strait of Hormuz — the narrow waterway through which roughly 20 per cent of global oil supply flows — faces closure. Macquarie warned that the timeline for such a move would be remarkably compressed.

The sector facing compounding crises

British travel companies entered 2025 still carrying the balance sheet scars from pandemic-era losses. The post-Covid recovery had been gathering pace — On the Beach reported a 58 per cent jump in app-based bookings and recently submitted its platform to ChatGPT in hopes of capturing AI-driven holiday searches. Those investments now look premature.

The FTSE 100 swung to a 0.5 per cent loss Thursday as the travel sell-off spread contagion fears across consumer-facing sectors. Airlines are particularly exposed: higher oil prices squeeze margins even before factoring in collapsing passenger demand for affected routes. Package holiday operators like Jet2 face the double burden of pre-booked hotel capacity they may struggle to fill and anxious customers seeking refunds.

What makes this crisis different from typical geopolitical disruptions is how little rational connection exists between the threat and the response. Previous conflicts that hammered travel demand — the 2015-16 terror attacks across Europe, for instance — targeted the actual destinations where bookings fell. Here, British families are cancelling Greece holidays because of explosions in Iran. The contagion is psychological rather than geographical.

The shape and timing of any recovery depends entirely on variables no travel executive can control: whether the Strait of Hormuz stays open, whether oil retreats from current levels, whether news cycles shift attention elsewhere. Morton's admission that 'the timing of when the conflict will end and the shape of recovery in demand to these destinations are unknown' is unusually frank. Translation: we have no idea when normal trading resumes, so any profit forecast would be fiction.

For British holidaymakers, the calculus is simple if illogical. Why risk the sun in Turkey when there's war on the news, even if that war is nowhere near your resort? For UK travel stocks, the calculus is grimmer: how do you rebuild confidence when fear has already overridden the facts?

More articles by Ross Williams