Tui Group called for Covid-19 testing to avoid compulsory quarantines as it trimmed its winter programme by a further 20% to give a 40% year-on-year reduction.
Tui, which has secured two German government bailouts totalling more than €2.25 billion, is cutting 8,000 jobs in an effort to reduce costs by 30% by 2023. The company announced the closure of 166 travel agencies in the UK and Ireland in June to leave a network of 350 shops.
The winter cutbacks, following an 83% drop in bookings for this summer with average selling prices down 19%, reflects the current uncertainty relating to government travel restrictions.
“This equates to 15% sold of our original programme reflecting the impact of cancellations from mid-March, versus 97% sold at the same point last year,” the European travel giant reported in a trading update this morning.
Tui’s adjusted winter programme is 30% sold but bookings are down 59% compared with normal levels seen at this time last year.
“We will monitor and flexibly adapt our capacity, in line with demand as well as travel restrictions, to ensure we continue to responsibly offer our customers a range of safe winter holiday options,” the group said.
Tui expects to operate 80% adjusted capacity for summer 2021.
“Over the last month, we have been impacted by continuous changes in travel advice by various governments across our markets,” the company said.
“We have adapted by remixing and trimming our Q4 capacity from 30% to 25%, to alternative low-risk destinations, enabling many customers to continue their holidays as planned.
“We expect travel advice by each regional government to remain highly fluid, and we subsequently expect short term bookings to continue until customers are able to plan with more certainty.
“Where possible, we would prefer to see a regional risk assessment policy being applied by each government rather than a blanket travel policy.
“In addition, if testing were to be made more available on arrival in destination and on departure then this would also help to avoid compulsory quarantine and movement restrictions.
“On an underlying basis we see strong customer intention to travel, with many customers wanting to secure their summer holidays well ahead of time,” the company said, revealing an 84% rise in booking levels made up of both new bookings and rebookings and helped by the early launch of the summer 2021 programme.”
All passengers taking Tui company cruises guests will be provided with Covid-19 testing 48 hours/72 hours prior to departure as part of their cruise package, with a mandatory negative PCR test result a prerequisite for travel.
UK-based Marella cruises remained suspended throughout the summer, in adherence with UK Foreign Office guidelines “and we eagerly await a positive change in advice”.
Tui added: “After having agreed additional liquidity support by the German Federal Government, we continue to evaluate options to achieve the optimal balance sheet structure to support the business over the longer term.”
Group chief executive Fritz Joussen said: “We have successfully restarted our operations; customers are enjoying their holidays with newly adapted hygiene protocols and we have taken 1.4 million customers on their holidays since restart.
“Destination availability at present is highly influenced by government policy and development of the pandemic, meaning the environment remains volatile, and is likely to remain so for the next few quarters.
“Leisure holidays remain important to customers and have been one of the most missed activities during the pandemic, with leisure travel expected to recover faster than business travel.
“Our integrated model, underpinned by our trusted and leading brand, offering differentiated products and attractive value propositions, combined with proven flexibility in a volatile environment, means we are strategically well placed to benefit as leisure travel volume recovers over the coming seasons.
“We are on track to complete the additional stabilisation package provided by the German Federal government as announced on 12 August with waiver approval secured from our senior notes bond holders.
“Our global realignment programme is firmly underway with digitalisation initiatives accelerated throughout the group.
“Tui will emerge a stronger, leaner, more digitalised business and is well positioned to benefit from the expected recovery.”