According to its own information, the Tui Group has been able to benefit from the increased demand in the holiday travel sector and has attracted around 2021 million new bookings since May 1,5. This also has a positive effect on the cash flow. This has risen to around 320 million euros.
According to a press release, Germany's largest travel group is cash positive again for the first time since the start of the corona pandemic. The German government has repeatedly helped this provider with aid packages worth billions. "Customer demand and booking dynamics are high as soon as travel restrictions are lifted. The figures for the start of the summer business are encouraging. Germany and continental European markets are showing high demand. In England, this will not be reflected until the fourth quarter. Business is coming back and the transformation of Tui is clearly having an impact," said CEO Fritz Joussen.
A total of around 1,5 million bookings have been received since the half-year figures in May, and the group is currently recording 2021 million bookings for the summer of 4,2. As before, during the pandemic, there was a significantly increased trend towards online bookings. In the third quarter of the business year, more than half of Tui customers booked their vacation online (52 percent). In addition, interaction with guests is increasingly taking place digitally, almost 70 percent of all TUI package tour guests use the TUI app (+21 percentage points). In addition to the Balearic Islands with Mallorca, the Greek islands, especially Crete and Rhodes, are among the most popular destinations for TUI guests. In addition, domestic tourism and cruises by the TUI Cruises Group company as well as the TUI Group's hotel and club brands - RIU, TUI Blue and Robinson - are in demand. In the reporting period, 283 TUI hotels were open and eight of the Group's cruise ships were on the move with guests. With the positive operational restart, TUI is generating cash inflows again. In the third quarter of the fiscal year, these are higher than the current cash costs, so that for the first time since the beginning of the pandemic, a positive cash flow before financing activities of around 320 million euros was recorded.
In the reporting period, TUI generated sales again with the successful operational restart. The accelerated transformation and the global realignment with an extensive efficiency program and strict cost discipline have simultaneously led to further savings and a very controlled outflow of funds. The inflow of funds was again higher than the current cash outflow and for the first time since the beginning of the pandemic, the Group recorded a positive cash flow before financing activities of around 320 million euros. Due to continued restrictions, travel could not be resumed in all markets or in all destinations, so sales reached 650 million euros and adjusted EBIT was -670 million euros.
The Group has also implemented various refinancing measures to strengthen its capital structure. The previously successfully placed convertible bond was increased by 190 million euros. In May, the Group announced the sale of a real estate portfolio of 21 properties. The sale underlines the "asset right" strategy initiated before the pandemic and was completed at the end of July. All 21 properties remain part of the TUI hotel portfolio, will continue to be operated jointly by TUI and RIU and will continue to contribute to sales in the Group's hotel division. The Group received 541 million euros in an initial purchase price payment, and a further 130 million euros can be added by 2023. Also at the end of July, TUI, 19 international banks and KfW agreed to extend the term of the revolving credit facilities (RCF) totaling 4,7 billion euros until summer 2024. In view of the ongoing Corona restrictions, the Group now has more time and flexibility in implementing the planned refinancing steps. The goal remains the rapid repayment of the state loans. As of August 9, 2021, TUI had financial resources of EUR 3,1 billion available. This is around EUR 1,4 billion more than in May 2021.
Demand for summer holidays remains at an unbroken high level. TUI has recorded a total of 2021 million bookings for summer 4,2. Due to the high proportion of package holidays in current bookings, average prices are nine percent higher than for summer 2019. Capacity for the core months of the 2021 summer program has been adjusted to 60 percent of the summer 2019 program. With clear travel regulations and the lifting of travel restrictions, demand has increased significantly in recent weeks, especially in the individual markets. Fritz Joussen: “It is necessary to move away from the rigid view of incidence values as a measure of the pandemic. We will probably live with Covid like we do with other infectious diseases. It is about mitigating the infections, the severity of a course of the disease and the consequences of an illness. In Europe, vaccinations are available to anyone who wants to be vaccinated, severe cases are not increasing noticeably and the health systems are not overloaded anywhere in Europe. This is a great success of the vaccination campaigns. Vaccination protects - vaccinated people are protected and no longer pose a significant risk to others. Those who are not or hardly at risk should now have their civil liberties fully restored. This also applies to children and young people for whom there is no vaccination recommendation. Whether or not you get vaccinated is and remains a personal decision. But a few must not be allowed to set the pace permanently and restrict the everyday lives of the majority."