TUI AG (LSE:TUI) warned fears over the omicron variant of Coronavirus (COVID-19) could impact its winter holiday programme, although it predicted bookings for next summer will return to near pre-pandemic levels as vaccination rates continue to rise.
The travel group reported a loss of €2.4bn for the year to 30 September 2021 compared with a €3.15bn loss in the previous year, after travel restrictions impacted its operations for much of the year.
It almost broke even in the final quarter with an underlying EBIT loss of €97mln, compared with a loss of €1.03bn in the same period of the previous year.
Full-year revenue was 40% down on the previous year at €4.73bn, but the success of vaccination programmes and the rebound of leisure travel in Europe during the summer led to a rise in fourth-quarter revenue of €2.1bn to €3.4bn.
The Hotels & Resorts business saw its first positive quarterly underlying EBIT result since the start of the pandemic, with a profit of €116mln in the fourth quarter compared with a loss €87mln.
Average occupancy in Hotels & Resorts was 66% in the final three months, with 92% of the group portfolio reopened as of 30 September versus 79% at end of June.
TUI said it has an “encouraging” pipeline of 4.1mln bookings for both winter 21/22 and summer 22, with 1.4mln bookings added since 3 October.
However, it cautioned that concerns over rising infection rates and the emergence of the new omicron variant “has weakened this positive momentum, particularly for winter”.
Winter 21/22 bookings are 62% higher than for winter 18/19 levels, before the pandemic struck, and trading is currently in line with winter capacity assumptions of 60%-80%, with the first quarter already 93% sold.
But TUI warned that winter capacity is likely to be reduced to the lower end of the forecast if there is a fourth wave of COVID-19 infection and new restrictions are imposed.
Easter bookings are currently at 90% of winter 18/19 levels, predominantly booked by British travellers, while May bookings in the UK are already 52% sold.
TUI chief executive Friedrich Joussen said it is too early to make a forecast for the 2022 summer season.
“But we are optimistic that tourism will be able to recover to 2019 levels next summer. We want to, we can and we will find our way back to economic strength,” he said.
“There will be flexibility in deciding whether to offer winter programme capacity at the lower end of the range depending on the so-called fourth corona wave and possible policy decisions with regard to the omicron variant.
“Capacity plans are regularly reviewed and adjusted.”
The company said it has a strong liquidity position of €3.5bn.
Net debt was €5.0bn at the year-end, down from €6.3bn on 30 June.
Shares fell 2.35% to 212.40p.