Hanover-based TUI Group on Thursday said bookings for summer 2021 look very promising.
“They are currently 145 percent higher than last year’s bookings for this summer,” the Germany-based travel firm said when announcing its third quarter results for 2020.
Since resuming travel activities, following the disruption caused by the coronavirus (Covid-19), TUI said the demand for holidays has remained high as 1.7 million new bookings have been received Group-wide.
After the official end of the travel warnings for most European destinations, holidays were also launched in the remaining TUI markets at the beginning of July.
In addition to the Balearic Islands, the tour operator launched vacations to the Greek Islands.
According to the company, in July, more than half a million customers across Europe travelled with TUI on their summer holidays.
“Our integrated business model with aircraft, transfers, hotels and cruise ships is intact and has proved its worth in this difficult environment. During the crisis it has enabled us to be the first travel company to fly guests on holiday. The summer holidays are conducted responsibly and with the highest standards of hygiene in all markets,” TUI CEO Fritz Joussen said.
TUI reported that its bookings for summer 2020 are down 81 percent and average sales prices down 10 percent, which equates to 16 percent sold of its original programme reflecting impact of cancellations from mid-March, versus 88 percent sold at the same point last year.
Rebased on adjusted capacity plans, TUI said it is currently 57 percent sold (by August 2).
The travel firm reopened 55 hotels in the quarter (15 percent of total portfolio) as lockdown restrictions eased worldwide from mid-May onwards.
TUI’s Q3 group revenue reached 75 million euros, down 98 percent, reflecting business standstill for most of the quarter with partial operations resumed from mid-May. The company reported Q3 group underlying earnings before interest and taxes (EBIT) losses of 1.1 billion euros, due to business suspension for most of the quarter, impairments triggered by COVID-19 and
net costs arising from ineffective hedging contracts.
Liquidity and financial resources secured
In the quarter under review, TUI initiated and implemented initial measures for its announced realignment, which comprises a global cost-cutting programme.
Overhead costs are to be reduced permanently and Group-wide by 30 percent. This corresponds to annual savings of more than 300 million euros. The first measures introduced include the planned fleet downsizing at TUI fly in Germany, the extensive restructuring of the French business with a focus on the core brands and the expansion of digitalisation, particularly in the UK, where 166 travel agencies will be closed. In addition, TUI will expand digital services at the holiday destinations.
Moreover, TUI said it had agreed an additional loan package with the German government worth 1.2 billion euros.
“The additional governmental loan will secure our liquidity in the event of further long-lasting travel restrictions and disruptions through COVID-19. The securing of financial resources will allow us to focus on our operating business and at the same time drive forward the realignment of the Group,” TUI’s CEO added.