TUI Group’s revenue collapsed by 98% to €75 million in the 2Q2020, with losses of €1.1 billion bringing TUI’s nine-month loss to €2 billion.
Bookings for summer 2020 are down 81%, with average prices falling by 10%. The tour operator said that it will seek to make “permanent and group-wide savings of 30%”.
Only 55 hotels reopened in the quarter – approximately 15% of the total portfolio – with average occupancy of 23%, which the Group described as “encouraging”.
TUI has sold 16% of its original 2020 capacity, and 57% of its adjusted capacity. This time last year it had sold 88% of its summer 2019 holidays. For the 2020-2021 winter season, TUI reduced capacity by 40% with overall bookings down “broadly in line with this capacity adjustment”. Bookings for summer 2021 are described as “very promising”, rising 145%, with the average selling price increasing by 9%.
A comprehensive review is underway across the business. “We are targeting a permanent annual saving of more than €300 million, with the first benefits expected to be delivered from FY21 and full benefits to be delivered by FY23. Negotiations have begun within respective business units. In two years’ time, TUI Group will emerge stronger, leaner, more digitalised and more agile, in what is likely to be a much more consolidated market.”
The company said it expects FY20 restructuring costs to be around €240m in FY20, €40m in FY21, and €10m in FY22.
Fritz Joussen, Chief Executive, said: “Our integrated business model is proving its worth even in the crisis. The implementation of our hygiene and safety concepts and the relaunch 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.”