By Kristy Dorsey
Vaccinations and rapid tests make will make an end to the standstill in tourism “possible” this coming summer, the head of the world’s largest travel operator has said.
Speaking after Tui posted a loss of £613 million for the first quarter of its financial year, chief executive Fritz Joussen noted the “special significance” of the UK market where the vaccination programme is most advanced. The Anglo-German operator hopes this will help kickstart a summer recovery from the Covid pandemic that all but wiped out travel during 2020.
Tui has received bookings for 2.8 million summer breaks, just more than half of 2019 levels. More than half of those were made by UK-based customers, and about the same proportion were made with vouchers issued after holiday cancellations last year.
Mr Joussen said there is a lot of pent-up demand, with people “sitting on their suitcases…waiting for what opens first”. Holidaymakers are also spending more on longer and more luxurious trips, with average holiday prices up by 20%.
The group is planning to operate at 80% of 2019 capacity this coming summer, and expects that the peak booking season is yet to come as consumers wait for further clarity on the situation. Daily bookings in January were 70% higher than in December.
“The English market has a special significance for our company,” Mr Joussen said. “We see an impressive pace and ambitious targets for vaccinations there.
“Vaccinations and rapid tests make an end to the standstill in tourism possible. I am hopeful that after a slow start, more energy is now being put on vaccination and the availability of rapid tests in other countries.”
During the three months to the end of December – a traditionally weak period for the sector – Tui’s underlying losses more then trebled as revenues plunged by 88% to £420.2m as coronavirus lockdowns and travel restrictions across key European markets took their toll. A total of 116 of its hotels were open at the end of the quarter, compared to 229 a year earlier.
The company has agreed a third financing package of £1.58 billion with its shareholders, banks and the German government, while cash and loan facilities of £1.84bn has “liquidity bridged to summer 2021 travel recovery”.
READ MORE: Tui considers cash boost
Tui said efforts to permanently reduce its cost base by 30% are on track to deliver annual savings of approximately £400m by 2023. Of the 8,000 roles impacted by this programme, the company has to date shed 5,000 full time equivalent staff. The total number of group employees at the end of December was 37,081, down by more than a third from 56,448 on the same period a year earlier.
Despite Mr Joussen’s hopes for a vaccination-led revival, the board did not issue financial guidance for the coming year given the “ongoing and significant uncertainties” around current travel restrictions.
“As expected, customers will book their summer holidays much later this year than in normal years,” he added. “However, demand remains strong, people want to travel – this is shown by the already good number of bookings for the summer.”
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