THOMPSON Holidays owner TUI Travel hailed a "significant recovery" in consumer demand today as holidaymakers ignored the slump.
The firm said UK bookings for the summer season had risen 13% in the six weeks since early February despite a 9% rise in average selling prices.
"We are encouraged by recent strong trading trends and are confident as we move towards the summer season," the company said.
British holidaymakers have faced headwinds including a much weaker pound as well as recession, although TUI's update signals sunseekers are determined to head abroad after two disappointing UK summers in a row.
Unemployment has not risen as high as first feared, while would-be holidaymakers seem so far undeterred by concerns over potential tax hikes to help repair the UK’s gaping deficit.
UK booking growth was well ahead of capacity - previously cut by the firm in anticipation of weaker demand - and the holiday stock it had left to sell, TUI said.
The company saw even stronger growth in French and Nordic markets, with bookings up 21% and 23% respectively.
TUI added that it had almost fully sold its winter holidays, with much stronger pricing seen in the late booking market because it was left with fewer holidays to sell at discounted prices.
Shares in the firm were flat today after a strong run which has seen TUI gain 10% since the beginning of March, although rival Thomas Cook added more than 2% after the update.
Langton Capital analyst Mark Brumby said: "The second quarter has clearly remained strong and the trends in place look good.
"Despite potential concerns over the Budget (and the post election Budget), the World Cup and potential rises in interest rates and taxes, the group is confident that it is going to deliver for the full year."