tour operator
Tui expects return to profitability
Tui AG logo at the group headquarters in Hanover. Photo: Moritz Frankenberg/dpa
© dpa-infocom GmbH
The Corona crisis has put the tour operator Tui before a severe test, including state aid worth billions. The current holiday trends give CEO Joussen reason for hope.
The Tui travel group, which was hit hard by the Corona crisis, expects to return to profitability before the important summer season.
So far, the booking level for the summer has been around 85 percent of the pre-Corona summer of 2019, the tourism giant announced on Wednesday in Hanover. As a result, Tui should become profitable again in day-to-day business this financial year, said CEO Fritz Joussen.
At the beginning of the pandemic two years ago, the Corona requirements had largely deprived Tui of its business basis. In order to survive the consequences, the company received state aid in the billions. But with the return of tourism, it is now becoming apparent that Tui will emerge stronger from the crisis, said Joussen.
In the winter half-year 2021/22, the operating loss adjusted for special effects was more than halved compared to the same period of the previous year, which was characterized by the lockdown, from 1.3 billion to around 604 million euros. Sales increased sixfold during this period from 716 million to 4.5 billion euros.
From January to March alone, Tui reportedly had 1.9 million guests, almost ten times as many as a year ago. Together with the summer, there are eleven million customers so far. According to the company, the additional bookings in the past six weeks were even higher than the comparative values of 2019.
“Tourism is a market that is very healthy and is back right now,” said Joussen. The most important phase for the industry, the summer season, is still to come. “In the summer you either win the year or you don’t,” emphasized the CEO.
Tui is encouraging that customers are currently spending significantly more money per trip than before Corona, the average prices for the summer are 20 percent up. This is due to a high proportion of package tours, longer vacations, more distant destinations and higher demand for luxury hotels. For those looking to travel, these factors could mean there could be fewer last-minute bargains this year, Joussen said.
With a view to state aid, the Tui boss announced that he would soon be reducing further credit lines. “It will happen quickly.” He did not give details. At the beginning of April, Tui had already reduced the funds made available by the federal government and private banks during Corona from almost 4.3 billion euros by around 700 million euros. At the beginning of May, the group, including the credit lines, had over 3.8 billion euros in financial resources. Net debt was around 3.9 billion euros at the end of March – a decrease of 1.2 billion euros compared to the previous quarter.
There is also a trend reversal in personnel policy. The reduction of 8,000 jobs worldwide has now been completed. “That’s done,” said Joussen. Tui is now starting to build jobs again. There are currently around 1,500 additional positions to be filled, for example in the field of digitization.