Tui said they are more optimistic about a European tourism rebound spurred by looser travel curbs and diminishing rates of coronavirus infection, even as it signalled potential turbulence in the months ahead. The world’s biggest tour operator said yesterday (Wednesday) that a pick-up in demand is “clearly evident”, with holiday reservations doubling in April. Still, the Germany-based company now sees revenue declining in the fiscal year through September after a delayed start to the summer season.
TUI is counting on a surge in bookings to revive cash flows after suffering a €1.3 billion loss in the first half through March. Chief executive Fritz Joussen said a reopening of leisure travel from the UK will help but doesn’t go far enough, while the company could face challenges refinancing some €4.6 billion in debt maturing in the fiscal period for 2022.
Confidence in a travel revival has been partially rekindled by the UK’s move to restore foreign holidays from May 17th following the success of its Covid-19 vaccination programme. Joussen said UK bookings to Portugal surged 182% last weekend after it was listed among 12 destinations with no required quarantine for travellers returning to Britain, though he said the exclusion of Spanish holiday islands in particular was disappointing.
“People are booking for Portugal but it’s not a big destination for us,” he said. “Spain and Greece were needed. Majorca is at the same level of infection as the UK so where is the problem?”
Some Britons may now seek to rebook for later in the year or 2022, extending a trend that has reduced group-wide bookings this summer to 2.6 million from 2.8 million in March. As of May 2nd, levels were down 69% compared with 2019.
Meanwhile, the EU is trying to get its ‘vaccine passport’ system running by the end of June, prompting TUI to stand by plans to offer 75% of its 2019 capacity in the peak months of July through September. Germans are already able to holiday in Majorca and the Canary islands after the lifting of a general travel ban, and TUI Cruises has resumed operations in the Canaries.
