Due to the low demand for Europe’s largest holiday company, TUI faces a loss of €1.1 billion (£994m) during the months of April and June. It is because of the low travel demand which caused a 98% fall in revenue.
However, it was taking people again for holidays in mid-June as there was a surge in travel. But still, summer bookings were low by 80% as compared to last year. And the company did not expect demand to return to normal until 2022.
The company has reopened more than half of its hotels worldwide, including in Europe, Mexico, Egypt, and the Caribbean. Though the average occupancy rate was 23% to allow for social distancing.
However, the company has not resumed operations of its cruise. It has suspended operations until later in August.
Rebound During Summer Season
The firm’s chief executive, Fritz Joussen, said that after the restrictions were lifted TUI was the first travel company to fly passengers on holiday and stressed that “summer holidays are conducted responsibly and with the highest standards of hygiene in all markets”.
“We acted very quickly at the beginning of the crisis in March and we responsibly mastered the new start in the summer – together with governments and partners. We will now sustainably reduce our costs and thereby strengthen our position in the market,” Joussen said.
Tui said it would not provide a forecast for the rest of the year, as the pandemic continues to impact travel.
Due to the UK government’s Implementation of new travel restrictions and quarantine measures, there were a lot of fresh cancellations. TUI canceled all traveling between Britain and Spain until 9 August.
The TUI company is decreasing its holiday capacity for 2021. But says bookings for that year are “very promising”
However, it Hope’s that there will be a return to normal in 2022.
The company received an extra €1.2bn of funding from the German government. So it can meet the expenses for the winter season.
This is on top of a €1.8bn loan commitment it received from German state lender KfW in March. As travel ground to a halt across Europe, taking its total government support to €3bn.
TUI is the UK’s largest holiday operator. It announced in July that it is shutting 166 high street travel stores in the UK and Ireland. It made the staff work from home. As the coronavirus pandemic has hastened the shift to booking holidays online rather than on the high street.