Specialist
Former C-level executive at Tui AG
Agenda
- Tui’s (LON: TUI) bookings outlook in 2021-22 and changes to the bookings cycle
- Pricing outlook and gross margin implications
- Operating cost reduction opportunities
- Working capital dynamics in light of the challenging demand environment
Questions
1.
What is your 2021 bookings outlook for Tui, in light of the relaxation of travel restrictions in key markets such as the UK and Germany?
2.
You mentioned the bookings cycle in a normal year. What are your expectations for Tui’s 2021 and 2022 bookings cycle across percentage of capacity sold and the timings around that?
3.
What do you think is a realistic capacity for Tui to fill?
4.
What are your expectations for Tui’s 2022 bookings cycle?
5.
What are the likely deposits on new bookings for summer 2022? How has that changed due to coronavirus?
6.
Would you anticipate any changes in deposits such as zero deposit fees to secure bookings due to the uncertainty around holidays going ahead?
7.
How do you think Tui is approaching capacity for 2022 given capacity cuts in 2021?
8.
How agile can Tui be with its capacity planning? I’d assume the possibility of new coronavirus variants continuing into 2022 would make the company want to be agile around removing or adding capacity.
9.
How easily do you think Tui can add hotelier capacity?
10.
There has been a decent price increase from Tui in 2021. How sustainable would you say these average price increases are through 2021 and into 2022?
11.
Do you think the double-digit ASP increase is likely to continue?
12.
Could you describe the supply payment cycles? How does Tui make payments for different types of capacity?
13.
What percentage of hoteliers would be on a prepayment or deposit?
14.
You mentioned Tui might also still be settling payments with suppliers. Would this be for excess capacity that wasn’t filled, or still for extended payments from the winter months? What is that excess cash for?
15.
Do you think pandemic-related challenges have meant that hoteliers might seek to reduce their dependence on tour operators such as Tui?
16.
How high is the maximum movement in working capital, both inflow and outflow, given the customer booking, deposit and supplier payment cycles? What are your expectations for 2021? How would you compare those expectations to a normal year?
17.
How do you assess Tui’s balance sheet and capital structure given the working capital challenges it’s facing? What do you think needs to be changed in the company’s long-term capital structure?
18.
What are your expectations around additional German government support for Tui’s German facilities? This government has already given multi-billions in support. Can we assume it will continue to support the company if further liquidity is required?
19.
What additional divestment opportunities does Tui have, perhaps with what’s left of the hotel portfolio or other assets? You mentioned a number of asset sales during the pandemic.
20.
The sale of Tui’s stake in Riu Hotels, announced in May 2021, came through at around a 11.9x multiple of EBITDA. Is this indicative of any future sales on the remainder of Tui’s estate?
21.
There have been concerns around potential ring-fencing of advanced customer payments. Obviously, the CAA [Civil Aviation Authority] is investigating this. What ring-fencing do you think might be required?
22.
What ring-fencing do you think would be reasonable or bearable for Tui’s cash flow?
23.
I believe Tui hopes to achieve up to EUR 400m in savings by 2023. How could this realistically be achieved?
24.
What do these cost-saving measures mean for liquidity? How would you assess Tui’s liquidity runway? How sufficient do you think its liquidity is to weather the remainder of the crisis?
25.
What headroom do you think Tui requires going into the winter period, provided there isn’t another lockdown?
26.
What’s your long-term growth and opportunities outlook for Tui? We’ve discussed the challenges facing it in light of the pandemic.
27.
What are Tui’s market share gain opportunities from smaller competitors exiting the market? The company remains one of the largest market players.
