TUI has temporarily suspended most of its travel operations due to the Covid-19 pandemic. Company spokespersons say the move is a “compliance” and “industry adjustment” move. The news comes as the whole industry is in a state of shock as to “next moves.” TUI is on a shortlist of companies investing gurus say may be dragged down by the coronavirus pandemic (Bloomberg).
Update: March 23, 2020, TUI issued its latest situation report.
In a statement from TUI, not only does the tour operator call a halt to most operations, but the executive board has also decided to withdraw from the financial guidance from 2020. The TUI statement reads, in part, as follows:
“In this rapidly changing environment the safety and welfare of our guests and employees worldwide remain of paramount importance and thus TUI Group has decided, in line with government guidelines, to suspend the vast majority of all travel operations until further notice, including package travel, cruises, and hotel operations. This temporary suspension is aimed at contributing to global governmental efforts to mitigate the effects of the spread of the Covid-19.”
According to the announcement, the TUI board says it is continually evaluating the current situation. The announcement makes vague suggestions that the company is considering certain actions to be put in place for “customers, colleagues, and stakeholders,” but no specific actions beyond service discontinuation are mentioned.
Interestingly, TUI said it had cash and available facilities of approx. €1.4 billion and year-to-date performance had been in-line with expectations prior to Covid-19.
TUI Group is one of the world’s biggest tourism groups operating in more than 100 destinations worldwide. The group employs some 70,000 plus people worldwide.
The group’s stocks are in the proverbial tank at $2.46 per share at close on Friday compared to a five year high of $12.08 back in 2018. TUI has also applied for state aid. The company had just announced the suspension of all pre-payments and cancellation of contracts last week. Hoteliers here in Greece are reeling at the news. The level of uncertainty is just plain scary. Not only are TUI’s stocks hitting bottom, but shares of cruise operator Carnival (CCL) are also down more than 70% year to date.
Global stock markets plummeted even farther on the U.S. Federal Reserve cut its benchmark interest rate to near zero Sunday evening to help blunt the economic damage from the fast-spreading novel coronavirus.