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Tui boss Joussen reports ‘extremely strong’ bookings for 2021

Europe’s biggest travel group Tui reports “strong” demand for next summer and foresees “normalised demand” from 2022

Tui chief executive Fritz Joussen reported bookings for summer 2021 up 145% year on year this week and average selling prices up 9%.

He said: “Even if you exclude voucher re-bookings, bookings for next year are up. We had 430,000 new bookings [for summer 2021] since June, 1.5 million in total.

Tui reported a loss of €2.3 million for the nine months to June, but forecast a “return to a normalised level of demand in 2022 and beyond”.

Asked to justify the forecast of a return to “normal” demand, Joussen said: “We have 145% more bookings for next summer. That is extremely strong. That booking level is more than double this year for next year. How much evidence do we need?”

He said: “Yes, we need a vaccine. The general assumption is we will see a vaccine potentially next year. Then demand will be returning.”

However, Tui has reduced capacity for this winter by 40% and for summer 2021 by 20%.

The combination of strong advance bookings and reduced capacity has pushed up average selling prices by 9% to date.

Joussen said: “This year definitely you can find a bargain, also for the winter. Next year, with the [number of] bookings in, it is more expensive.”

However, Joussen insisted: “There is still volatility, so we are happy we agreed new financial headroom with the German federal government.”

Tui announced an agreement with the German government for an additional €1.2 billion in credit ahead of the results.

It followed an earlier deal in April with Germany’s state-owned development bank KfW to provide €1.8 billion in credit.

Joussen explained: “We always made clear at the first [credit] application that the money would last to the end of May. We thought we were in a much worse position. It still might be enough.

“But the volatility and uncertainty are big. The risk of a second wave [of Covid-19] is exactly why we need the secondary cash.”

Asked if the group could be forced to sell parts of its business he insisted:“There will be no forced divestments. When we do something we do it for strategic reasons.”

Tui reported a monthly cash-burn rate of €550 million-€650 million in the third quarter to June, including customer refunds.

Joussen said €350 million was paid out to customers in June, adding: “More than 95% is paid back now. At the end of July, largely everything was paid back.”

But he said: “Sometimes it’s not so easy [to pay a refund]. If you [a customer] paid via a travel agent, we need to know how you paid.”

Joussen forecast the group could operate through the three months to September in a cash-neutral state, without drawing on its cash reserves or credit.

But he said the group “will be a little cash burning again, about €100 million a month” in the final three months of the year – or the first quarter of Tui’s 2020-21 financial year.

He reported: “Our cash facilities in place now total €2.4 billion.”

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