February 28, 2020 / 3:15 PM / a month ago

UPDATE 1-On The Beach warns of weak annual results as coronavirus hits global travel

(Adds shares, details on outlook, marketing spend, background)

Feb 28 (Reuters) - Holiday package provider On The Beach Group forecast full-year results below market expectations on Friday, as the coronavirus epidemic disrupts global travel.

The company said demand considerably fell after the number of infections in Europe rose and as the coronavirus spread to popular tourist destinations, including Tenerife in Spain’s Canary Islands.

“The Group experienced a small but noticeable reduction in demand for Summer 2020 travel following the early reports of COVID-19 cases in early February,” the company said.

Shares of OTB were down 3.3% at 320.4 pence at 1511 GMT.

The outlook comes weeks after the company said it expected strong sales growth during the summer, helped by higher marketing spends and gains in market share from Thomas Cook’s collapse.

The virus, which emerged late last year in China, has sent demand for travel tumbling in recent weeks as the outbreak has spread around the world, raising fears of a pandemic that could plunge the global economy into recession.

Spanish travel technology firm Amadeus also forecast slower growth in 2020 core profit on Friday, while British Airways-owner IAG also warned of a hit to earnings from the virus.

OTB also does not expect to benefit from its marketing spend for the year as demand falters. Analysts expect the company to post annual pretax profit of 37.9 million pounds ($49.25 million), according to Refinitiv Eikon data.

$1 = 0.7696 pounds Reporting by Tanishaa Nadkar in Bengaluru; Editing by Arun Koyyur and Anil D'Silva

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