As indicated in our Q1 results on 11 February, Financial Year 2020 started exceptionally well in terms of booking trends which continued in January. Since the announcement of the first COVID-19 cases in Northern Italy, Tenerife and the related developments in other regions, in line with the industry, we have experienced weaker bookings in the last week, especially for our remaining, near-term and lower volume winter season. Due to the strong trading prior to last week, year to date bookings remain well above prior year. At this point in time, we only see a marginal effect on our operations, for example due to necessary re-routing of Mein Schiff 6 in Asia.
Given that the situation is still evolving, it is not yet possible to estimate the potential financial impact across our business of the current COVID-19 development. We are continuously monitoring the situation very closely and actively evaluating the implications for our business.
The health and safety of both our guests and employees remain our top priority. We have therefore set up task forces across all our markets and we are in close contact with the relevant authorities and ministries. All TUI companies, including hotel and resorts, cruise companies, airlines, follow predefined and established procedures to prevent infections and have increased their hygiene measures.
While actively managing the current situation for our customers and employees, our priorities remain as follows:
- Driving additional and various cost measures such as budget reduction in administrative areas, hiring freezes as well as the postponement of non-critical projects.
- Carefully reviewing options for capacity management, if needed.
- Delivering on our four strategic initiatives towards becoming a more digital platform business and our Markets transformation programme.
TUI is experienced with handling external challenges, and therefore we are confident to deal with the current situation in the best interest of our stakeholders. Based on our resilient business model, the double diversification across our markets and destinations and our robust financial structure, we are well positioned to deliver sustained growth going forward.