Tui has announced summer bookings will be close to 2019 levels as it winds up some of the pandemic-era credit facilities extended to it by the German national development bank KfW and private banks at the end of this week.
The first tranche of aid, granted by the German government and private banks, will be reduced by around €700 million on April 1.
Chief executive Fritz Joussen said it was the right time to reduce the “rescue umbrella” with the company well-positioned for growth in the post-Covid period and expecting “stable business development” this year.
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Summer 2022 bookings are currently at 80% of summer 2019 levels, up from 72% at the start of February, with the company reporting “good demand and high booking momentum”.
It has taken a further 2.1 million bookings for this summer since its February trading update, with the UK the most advanced market. UK bookings are up 14% on summer 2019.
For this winter and this summer Tui has taken 2.8 million additional bookings since the end of January. As of March 27, total bookings stand at 8.9 million for winter 2021-2022 and summer 2022 combined.
Average prices ‘strong’
Average prices for both seasons continue to hold up strongly, said the company, with this winter’s prices 14% up on 2019 and up by 19% for summer 2022, driven by a higher mix of packages compared with a normal year and reflecting “robust demand” for holidays.
In a statement, Tui said: “We expect to close the winter 2021-2022 programme as expected with capacity in the low to mid-range of our assumed range of 60% to 80% of pre-crisis levels.
“Bookings are currently at 66% of winter 2018-2019 levels, with 725,000 bookings added since the last update in February.
“Due to continued good demand with the full lifting of travel restrictions and the later booking profile, we expect summer 2022 to almost reach the normalised level of summer 2019.”
The company said bookings remained “largely unaffected” by the war in the Ukraine with sales only more “subdued” in its Nordic countries and Poland.
Tui also reported continued “positive booking momentum” in its Tui Hotels & Resorts division. Sales for its cruises division were expected to continue to be challenging for the summer due to the closure of ports worldwide and the trend towards later and short-term bookings.
Bookings for its tours and activities business Tui Musement are expected to increase as more destinations open up worldwide and outperform the increase in capacity for this winter and summer.
Temporary aid was ‘important and right’
A large part of the credit facility being returned on April 1 is part of the KfW Revolving Credit Facility. The company said its liquidity remains high at €3.4 billion even after the return of its first credit lines.
Joussen said: “Tui was a very healthy company before the pandemic. The worldwide travel restrictions, especially at the beginning of the pandemic, almost completely deprived us of our business basis.
“That is why temporary aid was important and right. Thanks to the credit lines from the German federal government and from the private banks and the contribution of our shareholders, we have steered Tui safely through its most serious crisis.”
Joussen thanked staff for their “outstanding commitment” over the past two years.
He added: “We are on course and the trends are intact. People want to travel, we see the demand in bookings and expect a good summer at Tui. The company is leaner, more digital and more efficient after the pandemic and the transformation.
“The pandemic aid from the state was mostly interest-bearing credit lines. In recently weeks, we already stopped using the state credit lines. As announced, we are now returning part of this state aid – this is another normal step towards normality and to refocus Tui for growth.”