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Tui chief downplays Omicron effect in upbeat forecast for 2022

Tui has reported “very few cancellations” due to restrictions imposed in response to the Omicron Covid-19 variant and forecast summer 2022 bookings will be “close to” 2019 levels.

Fritz Joussen, Tui chief executive, acknowledged “Omicron has an impact” and said of the latest restrictions: “It is better in other countries than the UK.”

But he declined to criticise the UK government, saying: “I’m not here to get involved in political decisions.

“When everyone who returns [from holiday] has to take a PCR test and everyone needs a screening test before they return, it has an impact. But the impact is not as high as I expected. Fortunately it is the lowest booking season and lowest travel season.

“Additional testing causes additional cost and that is not good for customers. But the most annoying thing is the unpredictability.

“Overnight there is a regulation that our customers need to do a test and 10,000 people suddenly have a different regime. If you change regimes and put on additional burdens I would hope they give lead times.”

Joussen insisted the current winter season would be strong despite the Omicron setback, saying: ““It’s still early days [since the new restrictions were introduced], [but] people are largely amending, moving to later in the winter or to Easter.

“We see very few cancellations. The total amendments are very small.

“Winter bookings are at 62% of pre-crisis levels and Q1 [October to December] is at 69% of the pre-crisis level and 90% sold. So I’m not too worried. Even Omicron cannot influence this number a lot.”

He added: “Prices are 11% up for winter. Easter [2022] is the first big season and April the first high season and bookings are 90% of pre-crisis capacity, with prices up by 18%.”

Joussen dismissed suggestions that the recovery in bookings would be stalled by the Omicron variant.

He argued: ““We have the Central and Western regions reasonably profitable this year and hotels and resorts at pre-crisis levels today.

“Cruises are booked at the pre-crisis level at higher prices.  Why shouldn’t we be better next year? The Northern Region [which includes the UK] is 35% booked for next summer, 50% above normal, at higher prices. This is not a little amount.

“So the strongest region is now the strongest [booked] at the strongest prices. I can’t imagine 2022 will be less than 2021. Summer 22 will be stronger.

“Prices are up, margins are very strong. Last year we had much less vaccination and much more uncertainty. There is no reason to think next year will perform lower than this year. I cannot see the negative picture.”

Tui reported a loss of almost €2.5 billion for the 12 months to September but “a successful summer” since the relaunch of operations and forecast: “Summer 2022 and the peak travel season [would] return to booking levels similar to 2019.”

It reported average selling prices for this winter up 15% on 2018-19 and forecast capacity would finish at 60%-80% of the pre-crisis level.

Prices for summer 2022 are up 23% on 2019 “predominantly due to the mix” of holidays, not due to higher prices, said Joussen.

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