TUI, the world’s largest travel operator, reported huge losses amounting to €1.42 billion ($1.67 billion) from April to June as it had been hit hard with booking cancellations due to the Covid-19 pandemic.
The European travel and tourism operator, which operates airlines, hotels, cruise ships, and travel agencies offering tour packages, earned €22.8 million for the same period last year.
The TUI Group, which owns five European airlines and several cruise ships, reported over a billion euro in lost revenues due to travel suspensions and booking cancellations especially at the onset of the Covid-19 outbreak.
The Hannover, Germany-based company secured a €1.2 billion stabilization package in the form of loans from the German government as part of the Economic Stabilization Fund to cushion the losses incurred during the pandemic.
TUI CEO Fritz Joussen said:
“Our integrated business model is proving its worth even in the crisis. The implementation of our hygiene and safety concepts and the re-launch of the business could be implemented in the flight, hotel, ship, and destination segments from a single source. This has given our guests a high level of security. With the second government credit line, we are prepared if the pandemic again has a significant impact on tourism.”
Despite initial setbacks, the largest leisure, travel, and tourism company in the world employing more than 70,000 workers in over 100 destinations, said travel and tourism demands have been picking up since tourist destinations started opening in June.
Optimism as demand returns in the tourism industry
As tourist destinations started opening and first trips were made in mid-June, the company reported 1.7 million new bookings since the resumption of travel activities.
After the official end of the travel warnings for most European destinations, holidays were also launched in the remaining TUI markets at the beginning of July.
What’s more promising according to the travel operator is the optimism from industry stakeholders that the hard-hit tourism industry is going to bounce back next year.
The Hannover-headquartered company announced that bookings for 2021 are already showing ‘promising’ signs with a 145% increase in bookings recorded for the summer of next year compared to last year.
As to summer travel bookings this year, as of August 2, the company said it has only reached 57 percent booked capacity aside from already making adjustments to mitigate losses.
“Our integrated business model with aircraft, transfers, hotels, and cruise ships is intact and has proved its worth in this difficult environment,” Joussen said.
Despite the crisis, the company also took pride in being the first travel company to bring German guests to affiliated beach resorts and hotels on the Spanish island of Majorca.
Joussen stressed they were able to achieve this only because they followed the highest standards of hygiene in all markets as well as implemented cooperation with governments of destinations.
“We were able to make integrated decisions on flight plans and hotel openings and also on the implementation of hygiene standards for all stages of the holiday. We also introduced massive cost reductions early and implemented them quickly and consistently,” the company said in a statement.
The additional loan from the German government also helped secure liquidity for Tui in the event of further long-lasting travel restrictions and disruptions through COVID-19.
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