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Shape of travel recovery ‘remains uncertain’ – On the Beach

Booking volumes have been and will continue to be “significantly influenced” by the evolution of the pandemic and responses from UK and European government policy, On the Beach warned today.

The OTA, reporting reduced annual losses, said it is “too early to say” what impact the Omicron variant will have on restrictions and demand.

However, the group has “well-rehearsed plans in place to deal with any ensuing disruption”.

On the Beach reported a pre-tax loss of £18.4 million for the 12 months to September 30, down from £36.7 million the previous year.

Revenue more than halved to £30.5 million from £71.2 million in the previous 12 months “after making an adjustment to add back the impact of cancellations”.

Booking levels were low throughout the UK lockdown between January and May while consumer confidence was “dampened” throughout 2021 due to “complex and inconsistent rules coupled with prohibitively expensive testing costs”.

Revenue was also affected by the decision in May to suspend new bookings for holidays departing before September 1.

On the Beach added: “The group continues to adjust for Covid-19 related cancellations, expected cancellations and amendments.”

Total exceptional items in the period of £10 million represents the estimated impact of Covid-19.

“This is primarily the result of Covid-19 related cancellations, expected cancellations and associated administrative expenses,” the company said.

The group raised £24.9 million via a share placing in July to help prepare for an expected recovery of international travel in 2022

The company had £56 million in cash at the end of September excluding customer money held in a ring-fenced trust account of £39 million.

On the Beach said it “continues to refund customers in advance of receiving refunds from airlines for cancelled flights and it does not issue refund credit notes”.

Chief executive Simon Cooper said: “The disruption caused by Covid-19 has lasted longer than anyone would have anticipated and the travel industry has been, and continues to be, one of the hardest hit.

“Whilst our trading performance has clearly suffered, our successful placing this year is testament to the support from our shareholders who see the long term value of On the Beach and it ensures we are well positioned as the market starts to normalise.

“Looking after our customers remains central to our thinking where we have invested across our digital platforms, brand and supply. We are also proud of our industry leading initiatives of free Covid tests and our ‘New Normal Booking Pledge’ which has enabled us to sustain high levels of brand awareness and customer trust through times of weak consumer demand.

“The shape of recovery for the sector remains uncertain due to the continued Covid-19 evolution and subsequent governmental responses.

“The flexible, asset light nature of our business model and use of our ring-fenced trust account, alongside the work the team has done over the last year, means we are ready for 2022.”

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