On the Beach says summer sales are 22% ahead of pre-COVID levels, but it warned future bookings could be hit by the cost of living crisis.

Announcing a pre-tax loss of £7m for the six months to the end of March, the online travel agent said it was too soon to tell how bookings in the near term will be affected by the rising cost of food and energy bills.

But the group said it was ‘excited’ about its success in attracting more premium customers, adding that the recent relaxation of Spain’s entry rules should support a stronger lates market.

Group Chief Executive Simon Cooper said: “Throughout the pandemic, we continued with our strategy of investing in our brand, technology and customer proposition.

“Our deliberate focus on capturing share in the premium, longhaul and B2B segments, including accessing previously unavailable premium hotel stock, has resulted in us taking market share in this area.

“Whilst we have entered the second half with resilient sales, visibility of the near term outlook for the UK outbound travel industry remains limited.

“Customers are typically booking holidays with shorter lead times and we believe we are yet to see the full impact of the escalating costs of living on bookings. Despite this, we remain confident that we have taken the right actions throughout the pandemic and we will continue to support our customers and staff as a priority.

“Our investments in brand and proposition will ensure profitable trading into the second half and has left us in a strong position to continue growing market share.”