Specialist
Former C-level executive at Tui AG
Agenda
- Q4 2021-22 winter and summer bookings expectations and timeline for return to pre-coronavirus booking levels
- Competitive landscape – Tui (LON: TUI) vs low-cost operators such as Ryanair (LON: RYA) and EasyJet (LON: EZJ) vs OTAs (online travel agents)
- Tui’s unit economics outlook – hotelier inflation, fuel costs rising ASPs, working capital dynamics and cost reduction opportunities
Questions
1.
What are your expectations for Tui’s bookings during the 2021-22 winter period?
2.
Regulations have been lifted in the UK and it has been reported that lateral flow tests could become adequate as proof of COVID-19 status vs PCRs, making it significantly cheaper for customers to travel. How might that impact demand? What’s the balance between ease of travel vs the fears around the UK government’s coronavirus Plan B?
3.
Where might demand level out vs 2019 levels for the 2021-22 winter period? You mentioned estimates of 60-80% capacity adjustment.
4.
How buoyant is demand for summer 2022? During our previous Interview [see Tui – Recovery Scenarios, Margin Dynamics & Cash Flow Challenges – 21 July 2021] you expressed relatively positive sentiments around summer 2022 and H2 2022.
5.
What are your booking expectations across summer 2022? You mentioned December to February is a crucial period for Tui. How short could the bookings curve be for summer 2022, given the uncertain environment around travel and how we are yet to enter the peak winter season for coronavirus?
6.
How long could it take for the bookings curve to recover to 2019 levels, if ever?
7.
How do you consider the fears around demand for packaged holiday offers over 2022-23? How do you think coronavirus has impacted demand for packaged holidays vs holidays that can be booked or fragmented bookings?
8.
How can Tui defend against EasyJet and Ryanair – the low-cost operators in Europe – in the packaged holiday segment?
9.
What threat do OTAs [online travel agents] such as Bookings.com present to Tui?
10.
You mentioned it will be challenging for Tui to compete with low-cost operators in the coming years. How much appetite is there to actually go into package holidays among these low-cost operators?
11.
Is there anything that defends Tui from EasyJet? Hotelier relationships seem to be a smaller factor than they were historically.
12.
What is the threat of digital-only players such as On the Beach? What advantage or disadvantage does Tui have?
13.
How do you think hotelier relationships are developing in light of coronavirus, as well as any kind of pre coronavirus dynamics?
14.
What have been the historic increases in hotel inflation for an operator such as Tui and how could that change?
15.
How can Tui hedge against increasing fuel costs, if at all?
16.
What are your thoughts on the positive ASP trends?
17.
What is your margin outlook? We’re hearing about increasing inflation but also a rise in ASPs and a reduction in fixed costs.
18.
I think Tui’s Q1 2019 cash outflow was about EUR 1.5bn-2bn. What are you expecting from Q1 2022?
19.
What are your thoughts on Tui pursuing the asset-right strategy – which was presented a couple of years ago – and whether or not it’s the correct approach given the current climate?
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