Fewer hit theatre shows and cuts in consumer spending have dented city break bookings, but budget family camping trips are on the increase, travel specialist Holidaybreak said.

The Cheshire-based group said it expected its camping division to fare well through the economic downturn as families look for cheap holidays and trips with relatively low environmental impact.

Holidaybreak's camping division achieved its highest profit for several years in the year to September 30, at £13.8 million.

But the group said its hotel breaks arm had been particularly hit by weaker demand for London trips and short breaks in general, with sales currently down 15% for the 2008/9 financial year.

The company said the division is the "most likely to be exposed to short-term demand fluctuations as disposable incomes are squeezed". Fewer big hit theatre shows and exhibitions compared with a year earlier have also affected the division.

The company said sharply higher interest rate charges dragged down group pre-tax profits for the year to September 30, to £32.4 million from £40 million in 2007.

Chief executive, Carl Michel said: "The group's overall trading performance for the year was disappointing against out initial expectations for the year with an unsettled and unpredictable final quarter marking the start of the recession."

But he added, the diversity of Holidaybreak's businesses meant it would perform "satisfactorily" during the downturn.

Holidaybreak said revenues rose 27% to £455.1 million for the year, mainly due to the addition of new companies in the groups' education arm.

The company said this division, which organises activity and education trips for UK schoolchildren, was well placed to weather the economic storm as it is less exposed to discretionary consumer spending. The division achieved an operating profit of £10.9 million in 2008 and is 78% booked for the coming year, with growth in sales of 8%.

Source: Press Association

More news in National