Holiday company TUI Group (TUIGn.DE) said Thursday that a surge in bookings from Germany contributed to the recovery from the pandemic-induced slump, and the easing of travel restrictions in Britain will add momentum.
The Germany-based company said reservations jumped by 1.5 million since May, with a total of 4.2 million bookings for this summer, up from about 9 million in a normal summer, which helps ease pressure on finances that have been strained by the COVID-19 crisis.
“We’re replenishing the number of bookings every day,” CEO Fritz Jussen told reporters.
A slower-than-expected resumption of travel to the U.K. affected TUI in April and June, but Jussen said the number of bookings in the U.K. has been rising since the government lifted a quarantine for fully vaccinated people at most vacation destinations in mid-July.
However, the slower opening of the U.K. has forced the group to cut summer capacity to 60 percent of the 2019 program, down from 75 percent planned in May.
London-listed TUI shares rose 1 percent to 336 pence in morning trading, down from a previous gain of 3 percent.
Bookings from Germany and the rest of continental Europe helped TUI make cash flow positive in April and June, the first time since the pandemic began, with cash inflows of 320 million euros ($375.78 million).
“The good thing is that liquidity is gone, we’re not burning cash anymore,” Jussen said, adding that profitability will be “pretty good in the summer,” and bookings for 2022 were very strong.
TUI has borrowed more than 4 billion euros and repeatedly received help from the German government after a pandemic forced it to stop hosting holidays last year.
Jussen confirmed that the company will consider raising capital to repay the debt at some point. In July, the company’s banks agreed to extend its credit lines for two years through 2024.
In the third quarter, TUI reported an adjusted loss before interest and taxes of 670 million euros on revenue of 650 million euros.
($1 = €0.8524)