TUI bets on British demand to fill hotel rooms

Travel operator has yet to see immediate recovery as Covid-19 variants cause new lockdowns

TUI stuck with plans to offer four-fifths of its usual holiday programme this summer, betting on a surge in demand from Britain to fill hotel rooms as the country's Covid-19 vaccination programme gathers pace.

The world’s biggest tour operator said in a statement Tuesday that while current sales are at only 56 per cent of 2019 levels, prices are higher and customers are sitting on savings with money to spend, suggesting there’ll be a late surge in bookings as more people get jabs.

"The English market has a special significance for our company," chief executive Fritz Joussen said. "We see an impressive pace and ambitious targets for vaccinations there. Demand remains strong, people want to travel."

Like other leisure firms, TUI has seen any immediate recovery in demand undermined by flareups in new strains of the coronavirus, leading countries to impose strict new lockdowns. While Britain's inoculation programme is ahead of Germany, the company's other big market, even there the situation for travelers is deteriorating, with people returning from abroad required to self-isolate for 10 days, and do so in a hotel from February 15th.

TUI saw revenue tumble 88 per cent in its fiscal first quarter through December, with its usual net loss for the period swelling to €802 million.

Mr Joussen said that the trend toward buying costlier holidays reflected in existing bookings “is a good signal” and that “customers are in the starting blocks”.

The CEO called on governments to “use all opportunities” to ease restrictions and restore travel freedoms as soon as possible, saying he expects Britain to achieve herd immunity and vaccinate 75 per cent of its population by mid-July.

Hanover-based TUI, which is cutting a many as 8,000 jobs to survive the pandemic, saw its rescue funding topped up to €4.8 billion in December after securing a third tranche of aid from the German government and cash from private investors. – Bloomberg