Tour operator Thomas Cook has axed more than 100 partner hotels which have failed to meet its standards.
The company says it is now focussing on “higher quality” holidays with a higher profit margin rather than volume of sales.
Greece overtook Spain as Thomas Cook’s highest selling destination after a 40% boost in bookings.
Chief executive Peter Fankhauser said: “It’s worth noting that after strong growth last year, demand for the Spanish islands is levelling off.
“We’re seeing particularly strong competition for holidays to Mallorca and the Canary Islands in our UK business – a result of an increase in flight capacity and higher hotel bed costs.
“In this context, we’ve taken a deliberate decision not to chase volumes but to focus instead on higher quality holidays, in line with our strategy.
“As an example, our UK business has removed around 100 hotels from the programme after they failed to meet our high quality standards, even though many of our competitors continue to sell them.”
Last week, Thomas Cook cut ties with Jet2holidays by ending its commercial agreement with the growing Leeds-based operator.
Fankhauser added: “This [axing the hotels] does mean giving up some customer volume but I’m absolutely confident that it is the right thing to do to ensure we meet our customer promises of service, quality and reliability.
“We know that this will drive greater customer satisfaction and loyalty over the long term.”