Hays Travel incurred a pre-tax loss of more than £34 million in the 18 months to April 2021 as it faced the “most challenging period” in its history due to the Covid crisis and the loss of founder John Hays.
This figure compared to a pre-pandemic profit of almost £5 million in the year to October 2019, according to latest accounts filed with Companies House.
The group had been hoping its acquisition of 555 former Thomas Cook shops in October 2019 in a normal trading year would push turnover past the £2 billion mark.
But earnings for the period – noted as total transaction value – fell by 34% to £747.4 million and it returned a £35.6m operating loss as thousands of customers saw holidays cancelled in the pandemic.
However, that figure included £1.473 billion of new bookings and £726 million of net cancellations and amendments.
A business processing services division was established in March 2020 in response to the pandemic, providing call centre services to a range of external organisations. The new arm supported the cost of running the travel business and paying staff to rebook and cancel customer holidays.
Core revenue for the travel business represented £171 million for the 18-month period against £240.6 million in the previous 12 months, a decline of 28.9% or £69.6 million.
The Sunderland-based company re-evaluated its operations to respond to the changing market over the 18 months, focussing on reducing costs, generating revenue and protecting cashflow, supported by a two-year business recovery plan.
The firm had to make some “difficult cost reduction decisions” yet was able to save 44% of the jobs that had been at risk through a redundancy consultation processes.
Making it the firm’s aim of rebooking as many customers as possible meant large numbers of staff were unable to be fully furloughed, so Hays Travel was unable to fully benefit from the government’s Job Retention Scheme, although it did claim rates relief and business support grants “where possible”.
In the accounts, chair Dame Irene Hays described it as “the most challenging period in the history of the Hays Travel Group”, highlighting the impact of the pandemic and the death of her husband last November.
The company’s Peace of Mind Guarantee, giving clients the chance to cancel or amend holidays free-of-charge up to 50 days before departure dates, helped deliver new trading sales, before cancellations, in excess of £1.5 billion.
Throughout the pandemic, it managed to save £220 million of holidays, representing 27.7% of impacted bookings.
The company’s headcount also soared from 1,919 to 5,229.
Dame Irene said: “We have pivoted the business to a greater focus on digital and virtual customer service. We have increased our self-employed homeworking capacity to 353 homeworkers and we have recently acquired a business to operate our first franchise homeworking model.”
She added: “The income statement and balance sheet have been severely impacted by the pandemic. However, I am pleased to report that we have managed to sustain a business with cash balances in excess of £96 million, with no utilisation of debt.
“Whilst the board recognises that the recovery of the business will be challenging, we are optimistic for the future, with the high vaccination rate in the UK. There is significant pent-up demand in the UK for overseas holidays, as customers in some cases, have now not travelled abroad for two years.
“The business is in a strong position, having streamlined costs and has the resources and capabilities to deliver when the business returns and consumers are once again able to travel freely.”
The company expects some people to take multiple holidays in 2022 and beyond once all Covid-19 restrictions are removed.