Tui says it expects Covid vaccine will restart summer travel

Tui said it expected a return to foreign holidays this summer, thanks to the UK’s vaccination programme and rapid tests in other countries.

The world’s biggest travel operator said it had received 2.8m bookings for summer breaks, just more than half of 2019 levels, as customers splashed out on more expensive holidays. The German-based company is offering 80% of holidays compared with 2019 and said more than half of bookings were made by UK-based customers, partly because the British booking season starts earlier.

Greece and Spain were the most popular destinations, with breaks in Morocco also sought after; bookings for Turkey have been slower. About half the bookings were made with vouchers issued after holiday cancellations due to Covid-19 last year.

Average holiday prices were up 20%, Tui said, as holidaymakers are spending more and booking five-star packages in greater numbers. Its daily bookings in January were 70% higher compared with December, and the company expects the peak booking period is still to come.

The Tui chief executive, Fritz Joussen, said there was a lot of pent-up demand. “People are sitting on their suitcases and are waiting for what opens first. We just fly wherever is open.”

He added: “A look at the historically high savings rate in the EU also underlines that the scope for consumer spending is high. The significant increase in spending on booked travel reflects this very clearly. Holidaymakers are catching up and are willing to pay more for their holidays. People are trading up and booking longer and more luxurious holidays.”

He expressed hope that the UK would lead a recovery in travel thanks to its rapid vaccine rollout, and that other European countries would accelerate their programmes after a slower start. Tui expects three-quarters of the UK population to be vaccinated by mid-July, with the government aiming to give all over-50s a first jab by May.

Joussen said: “The English market has a special significance for our company. We see an impressive pace and ambitious targets for vaccinations there. Vaccinations and rapid tests make an end to the standstill in tourism possible. I am hopeful that after a slow start, more energy is now being put on vaccination and the availability of rapid tests in other countries.”

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Tui’s revenues were €486m (£426m) in the three months to December, down from €3.85bn a year earlier, as coronavirus lockdowns and travel restrictions took their toll. The Canary Islands were one of few holiday destinations that were open.

The company agreed a third financing package with shareholders, banks and Germany’s economic stabilisation fund to get it through the pandemic. The €2.8bn package, including a €500m rights issue, was completed in late January.

Julie Palmer, a partner at the restructuring firm Begbies Traynor, said: “Tui has been forced to cancel its holidays until March and Joussen will be waiting with bated breath for government announcements on the easing of Covid-19 restrictions in the near future. As vaccinations begin to roll-out globally and discussions of ‘vaccine passports’ for travellers continue, hopes are building that a recovery can begin in the summer with the pent-up demand from the past year.”

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