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JUST days ago holiday giant TUI (TUI) issued a new update cancelling a number of holidays yet again. This time Italy, Egypt and the Maldives were among the destinations off bounds for TUI holidaymakers in August, September and some into October "due to ongoing uncertainty around travel".

This is not where holidaymakers, hankering for a long-awaited break in the sun, want to be and this is certainly not where TUI wants to be.

We are in peak holiday season, but as if we needed further evidence of just how devastating the pandemic has been, TUI has confirmed how summer 2021 looks compared to summer 2019. Peak summer period July to October bookings, including all those amendments and voucher re-bookings, are down 56% versus July to October 2019.

Yet things are genuinely looking up at the world’s largest package holiday, with 1.5 million holidays booked since the first-half update three months ago. TUI says it has seen an increase in customer confidence and new bookings, and as a result it has seen its first cash break-even in the third quarter - the first time that has happened since the start of the pandemic.

Flights are taking off, TUI Cruises has been operating six of its seven Mein Schiff-fleet and early sales for Summer 2022 are ahead of pre-COVID-19 levels, when you factor in all those re-bookings.

Yet looking at the current situation, total Summer 2021 bookings including amendments and voucher re-bookings, are down 68% versus Summer 2019 with 4.2 million customers booked for a Summer 2021 holiday with TUI. With German, Belgian, Dutch and Polish holidaymakers appearing to be leading the charge back to vacay-normality.

But as the latest travel restriction update showed, options for travel are limited with TUI sending holidaymakers mostly to the Balearics, Canaries and Greek islands for the rest of the Summer 2021 peak season period.

TUI has done and continues to do everything it can to get people holidaying safely and within the ever-changing travel rules. But if planning a holiday is currently as fraught as it is, think how much more difficult it is to run the holiday firm. So little surprise that a warning that full-year revenue is set to fall year-on-year.

Analysts at broker UBS had been estimating revenues of €592 million for TUI’s third quarter, so today’s €649.7 million topped that. And is a definite improvement on 2020’s €71.8 million achieved in the same period. But both forecast that capacity over the peak period will come in at 60% of that seen in summer 2019; again beating initial assumptions that it would be 75% down.

Long-haul is the name of the game for TUI shareholders - if not its customers, just yet. The pandemic is far from over and while TUI’s diversity is its core strength, particularly its ability to up-sell regions open to business and shift holidaymakers’ dream destinations, the problem remains of managing the re-opening world’s appetite for holidays in the face of the virus’s own travel plans.

More on TUI

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