While restrictions have eased, holiday sales for next winter have dropped by about 40% and TUI has reduced capacity for next summer by a fifth, although bookings are currently significantly ahead of last year.
The company, which has borrowed nearly 2.9 billion euros ($ 3.4 billion) from the German government, does not expect business to return to normal before 2022. Like many other firms, it still cannot predict its financial performance for this year due to pandemic.
TUI’s over-the-top view reflects the high degree of uncertainty that still surrounds the future path of the virus.
The International Air Transport Association said on Thursday that flights within Europe in recent months are more than 50% below the same period in 2019, despite the reopening of borders. During the first four months of the year, Europe had a 44% drop in international tourist arrivals compared to the same period in 2019, according to the European Travel Commission.
More than 7 million jobs supported by travel and tourism in Europe are now at risk, according to an estimate of 6 million in June, according to IATA. “It is depressingly disturbing to see a further decline in air travel prospects this year, and the impact on employment and prosperity,” Rafael Schvartzman, IATA Europe Vice President, said in a statement.
Trillions in GDP at risk
TUI gains are just the latest sign of the devastating impact of the pandemic on travel and tourism, which is permeating dozens of other sectors and will hamper the global economy’s ability to recover.
Without “coordinated urgent action” between major governments, travel and tourism are expected to suffer “irreversible damage”, according to the World Travel and Tourism Council.
The industry body is now predicting the loss of 197 million jobs worldwide and a $ 5.5 trillion cut in the sector’s contribution to global GDP this year – a 62% drop compared to 2019. Up to 18.3 million jobs lost could be in the European Union.
The view has deteriorated rapidly. In April, the WTTC predicted the loss of about 100 million jobs and a $ 2.7 trillion blow to GDP. The escalation in the crisis is largely due to ongoing barriers to global travel, such as blanket quarantine measures and travel restrictions, the WTTC said in a statement last week.
“The confusing image of bans, quarantines and testing and uncoordinated international tracking measures, have prevented many people from traveling at all with the peak summer travel season 2020, all but being erased,” she added.
“Governments around the world need to align their policies and work in parallel with the private sector to revive travel and tourism so we can restore jobs and help revive the global economy,” said CEO Gloria Guevara.
The WTTC this week sent a letter signed by more than 100 industry leaders to the heads of the G7 economies, as well as Australia, South Korea and Spain, calling for a joint response and outlining measures to reverse the journey. on track.
These include mandatory masking in all modes of transport, contact testing and tracking, and removal of blanket quarantines.
Given its “essentially global nature,” travel and tourism represent one of the most integrated and interdependent supply chains in the world, “said James Gellert, CEO of RapidRatings, which analyzes the financial health of companies worldwide.
“Everyone is affected by a travel discount, whether you are destination dependent as hotel and restaurant groups or providers of products and services for companies in the travel and leisure markets,” he told CNN Business.