Tui, Europe’s largest tour operator, has reported a loss of more than €2bn so far this year and said it plans to cut its business costs by nearly a third after the pandemic forced it to bring its holiday itineraries to a standstill.

The Hanover-based group said on Thursday that occupancy at the hotels that it had reopened was around a fifth of normal levels as it posted a loss in earnings of €2.3bn in the nine months ending in June this year.

In the third quarter alone, it fell to a €1.5bn loss with revenues of €75m, down 98 per cent compared with the same period last year.

With its planes grounded and hotels shut, Tui was hit hard by the crisis and has only been able to make a slow recovery due to a faltering resumption of European travel as localised second outbreaks prompt governments to advise against holidays in certain areas.

In July, the UK government said that all travellers returning from Spain, one of Tui’s biggest markets, would have to quarantine for 14 days following a rise in cases there.

On Wednesday, the company said that it had secured an extra €1.05bn loan from the German government, on top of a €1.8bn facility secured in April, leaving Tui with total cash and liquidity of €2.4bn to fund it through the typically quieter winter months.

It said that bookings for this summer were down 81 per cent compared with last year and that it had slashed its winter holiday programme by 40 per cent in expectation of lower demand.

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The group added that it had launched a €300m annual programme designed to cut costs across the business by 30 per cent by 2023.

The company, which employs about 70,000 people and runs 400 hotels and 150 aircraft, said it expected “normalised levels of business” from 2022 but that it hoped to break even in the fourth quarter of this year as more travel resumed.

Fritz Joussen, Tui’s chief executive, said that Covid-19 had “significantly accelerated” the company’s efforts to move more business online.

Via Financial Times