Thomas Cook’s UK bookings for this summer are 3% higher than last year, but average prices are down 2%.
Releasing its pre-close trading update today, the travel giant blamed the drop in selling price on "product mix" and a higher demand for shorter holidays.
But it said the drop was partially "offset by new product and cost out and profit improvement benefits".
Capacity for summer 2014 in the UK market has been reduced by 1%.
Across all of its markets, the summer programme is now 50% sold, whish is 1% higher than this time last year, with overall bookings up 2%.
"Compared with last year, margins are expected to improve more than average selling prices, reflecting enhanced yield management and the benefits of our cost out and profit improvement programme, which is delivering ahead of schedule," said CEO Harriet Green.
She said following the sale of its interest in The Airline Group, shareholder in NATS, Thomas Cook has delivered its disposals target 18 months early.
"The continuing transformation of Thomas Cook, including the delivery of our strategic targets, remains our top priority and I look forward to sharing a full update at our half year results announcement on 15 May, together with details of further new product development and the second wave of our profit improvement plans," she added.
The group also reported that unrest in Europe has impacted winter 2013/14 bookings.
"Excluding Egypt, we have achieved higher average selling prices and bookings and gross margin has been positively impacted by improved yield management and cost efficiencies," it said.
"Despite significant market disruption, trading has been satisfactory for the winter season, which is 93% sold and in line with the booking pattern at the same time last year.
"We continue to expand the range of winter sun destinations on offer consistent with our strategy of broadening our product range."
