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Package holiday firm On the Beach has flagged a sharp drop in people booking trips to destinations including Turkey, Greece and Cyprus following conflict in the Middle East.

The travel group said it was expecting a hit to its profits, sending shares down by more than a 10th.

The warning shows signs of trouble for the travel and holidays sector, which is contending with a sudden reluctance among consumers to fly to destinations that are at risk of being caught up in the US-Israel war with Iran.

On The Beach told investors that although it does not have much exposure to countries in the Middle East, it had experienced a “significant slowdown in demand following the onset of conflict in the region”.

This was particularly affecting destinations such as Turkey, Greece, Cyprus and Egypt, it said.

“The timing of when the conflict will end and the shape of recovery in demand to these destinations are unknown,” the company said.

But it was anticipating its profitability to be impacted as a result, and was therefore temporarily suspending annual profit forecasts.

Analysts had been expecting adjusted pre-tax profits for the group to come in between £39 million and £43 million for the full financial year.

On The Beach sells holidays to resorts including: Dalaman and Antalya in Turkey; Sharm El Sheikh in Egypt, and Greek islands including Crete and Corfu. It also has multiple resorts in Dubai.

The firm also said that it had been “working round the clock” to bring customers home who have been directly impacted by the conflict.

Chief executive Shaun Morton said: “Following the onset of the conflict in the Middle East, our operational teams have been working round the clock to support directly impacted customers in resort and to enable a return home as soon as possible.”

Aside from recent events, On The Beach said its bookings had surged by a 10th between October and February, compared with the same period the year before, with bookings from repeat customers up by nearly a fifth.