With bookings for next summer already up by three percent compared to the same period in 2019, TUI Group is preparing intensively for a new start in 2021 after the coronavirus (Covid-19) crisis year 2020.
“The pandemic is not over, but there is light at the end of the tunnel and the prospects for tourism and for TUI are good,” the Group said while recently announcing its financial results for 2020.
According to TUI, 2021 will be a transition year for tourism, and 2022 is expected to see a return to pre-Corona levels.
2021 forecast not possible
The tourism group said that it is not possible at this stage to make a reliable forecast of the extent and period of travel activity in 2021 due to the continuing high incidence of infection and the resulting lockdowns in the markets and only a few available travel corridors.
Total bookings across all markets for winter 2020/21 are currently 82 percent lower than in the previous year, roughly in line with the reduced capacities.
“Average prices are four percent higher. Bookings for summer 2021 are three percent higher than for the regular summer 2019. Average prices for the summer 2021 programme are currently 14 percent higher than for 2020,” TUI said.
According to TUI’s financial results, underlying earnings before interest and taxes (EBIT) on a constant currency basis totaled -3.0 billion euros (previous year 893.5 million euros). Revenue amounted to 7.9 billion euros and was 58 percent down on the previous year (18.9 billion euros).
The tourism group said it had made an excellent start to the financial year before the outbreak of the pandemic, but the worldwide travel warnings since March 2020 then forced the Group to largely discontinue business due to the worldwide travel warnings.
TUI was only able to generate revenue again when it was able to fly its first holiday guests to Majorca in mid-June in a pilot project and a limited resumption of operations from July onwards.
“Greece was particularly strong as a holiday destination in 2020,” the Group noted.
Since the new start in the summer, TUI has safely made holidays possible for more than two million guests.
Cost reductions limit loss for the year
Following the lockdowns and travel restrictions as of March, TUI introduced cost-cutting and financing measures at an early stage and secured additional liquidity.
According to the Group, the long-term goal of reducing annual costs has been raised from the previous 300 million euros to 400 million euros.
Moreover, TUI recently agreed a third financing package totaling 1.8 billion euros with private investors, banks and the German government, aiming to strengthen its position its against the backdrop of increasing travel restrictions due to a renewed rise in the number of infections and the associated shorter-term booking behaviour of some customers.
“We want to return to our former strength as quickly as possible,” TUI Group CEO Fritz Joussen said, adding that the company is very well positioned to resume operations on a larger scale as soon as the lockdowns are lifted and destinations are reopened.