Low deposits and increased personalisation have helped On The Beach grow UK revenue by 26% during the first four months of its financial year.
The firm, which went public last year, said it had seen a shift in demand as a result of recent acts of terrorism.
The western Mediterranean is proving more popular than the eastern Mediterranean and Egypt.
Daily unique visitors to the company’s website increased by 18.9% year-on-year while the cost per unique visitor fell. Mobile visitors made up a record 67% of all traffic, a rise of 31% year-on-year.
The group’s international proposition, www.ebeach.se, is now live in Sweden and is currently being tested in Norway.
Chief executive Simon Cooper said: "The first four months of the new financial year has delivered a solid period of growth for On The Beach.
"Our strategy of investing in marketing, hotel supply and technology to drive growth has delivered an increase in revenue in line with the board’s expectations; with consumers attracted to our wide range of value for money beach holidays.
"On The Beach continues to efficiently execute its strategy. The board believes that the group is well positioned to continue generating attractive levels of growth and therefore remains confident in meeting management’s full year expectations."
The group will report interim results for the six months to March 31 on May 19.
On The Beach’s share price has surged in recent weeks going from £1.83 at the start of December to more than £3 at the end of January.
"We expect OTB to be the stand-out performer in a sector that we believe is becoming increasingly difficult for the competition: risks remain and the market is volatile," said analyst Wyn Ellis of Numis.
"OTB has been trading well and the company appears to be net beneficiary of the switch in consumer demand to the western Med."
One big advantage On The Beach has over traditional travel companies is that it can quickly adapt to shifting demand from holidaymakers.