LONDON: Holiday giant Tui is closing 166 High Street stores in Britain and the Republic of Ireland, the UK’s biggest tour operator has announced.
The decision was made following changes in customer behaviour as a result of the pandemic, the firm said in a statement, with the Anglo-German company calling COVID-19 the ‘greatest crisis’ the travel industry has ever faced.
Tui said that it would seek to move 70 per cent of the 900 staff affected by the closures to homeworking sales and services roles, and it would aim to relocate other employees in the remaining high street stores.
It announced it would cut 8,000 roles worldwide after posting losses of £747million in 2020 compared to £255million in the same period last year.
The announcement comes after Tui cancelled all flights to Spain up to and including August 9 after the government struck the country off the UK’s list of safe destinations and re-imposed a 14-day quarantine period on arrivals last week.
The timing of the shock U-turn has sparked widespread fury within the industry amid fears it will be the ‘final nail in the coffin’ for some tourism firms.
The global airline industry has been hammered by the impact of coronavirus, with the huge slump in demand for international travel leading to thousands of planes being grounded and staff numbers slashed.
In a statement released today, Tui’s UK and Ireland managing director Andrew Flintham said: ‘We want to be in the best position to provide excellent customer service, whether it’s in a high street store, over the telephone or online, and will continue to put the customer at the heart of what we do.
‘It is therefore imperative that we make these difficult cost decisions, look after our colleagues during such unprecedented uncertainty and also offer a modern customer service.
‘Customer behaviours have already changed in recent years, with 70 per cent of all Tui UK bookings taking place online.
‘We believe COVID-19 has only accelerated this change in purchasing habits, with people looking to buy online or wishing to speak with travel experts from the comfort of their own home.
‘We have world-class travel advisers at Tui, so we hope many of them will become homeworkers and continue to offer the personalised service we know our customers value.’
Tui has already closed down 70 travel agent stores in France, with job losses of nearly 600 in the European nation.
It’s hoped the restructure ‘should then enable Tui France to break even from 2021 onwards’.
Tui said that going forward they will focus on the ‘high-margin business with a few core brands’ as it plans to cut costs globally by 30 per cent.
In a statement Tui said: ‘The project foresees a reduction of 583 jobs, in the scenario of the closing of all own retail shops, which is approximately 60 per cent of the current Tui France staff base.’
‘The changes are now being discussed with the relevant committees and employee representatives in France.’
It added: ‘Tui France was already loss-making before the pandemic. In a structurally challenging market with a high cost structure and low margins, the company had been making losses in recent years.
‘In the wake of the corona pandemic, the situation for Tui France has again deteriorated significantly. A far-reaching package of measures is now needed to create a perspective for the company within the group.’
The Transport Salaried Staffs’ Association (TSSA) today condemned what it called ‘the government’s failure to act to save the travel trade industry’.
Manuel Cortes, General Secretary of the TSSA which represents staff in the travel trade industry said ‘We have been warning for weeks that High Street travel shops could become a thing of the past unless the government took urgent action to help our industry navigate this crisis. Today’s announcement by TUI means that Ministers must sit up, smell the coffee and act without further delay.
‘We need a bespoke package of measures to save our travel industry. I call on TUI and other employers to engage with our union so we can jointly lobby government for this to happen.’
Fritz Joussen, chief executive of the troubled giant, said the company should ’emerge from the crisis stronger’.
He added: ‘It will be a different Tui and it will find a different market environment than before the pandemic. This will require cuts: in investments, in costs, in our size and our presence around the world.
‘We must be leaner than before, more efficient, faster and more digital.’
The company’s report said: ‘The tourism industry has weathered a number of macroeconomic shocks throughout the most recent decades, however the Covid-19 pandemic is unquestionably the greatest crisis the industry and Tui has ever faced.’
It added that losses also came as a result of the grounding of the Boeing 737 Max aircraft after two crashes with other airlines.
This week Ryanair revealed losses of £168million during the pandemic but insisted it will continue flying to Spain after UK tourists were told not to travel there.
The low-cost airline, like its competitors, was forced to ground its fleet as COVID-19 wreaked havoc on timetables with travel bans and lockdowns introduced worldwide.
Ryanair said it suffered the ‘most challenging’ quarter in its 35-year history after carrying 500,000 passengers from April to June compared with 41.9million in the same period last year. Its share price fell 8 per cent in early trading this morning.
Meanwhile revenue collapsed from £2.1billion to £113million, with the Dublin-based carrier saying said a second wave of the disease was now its ‘biggest fear’.
But chief financial officer Neil Sorahan told BBC Radio 4 that it would not cut flights to Spain, saying: ‘As things stand, the market remains open, the schedules remain in place and we continue to operate in and out of Spain as normal.’
Speaking about the UK government advising against non-essential travel to Spain due to coronavirus, he told Reuters: ‘I think it is regrettable, very disappointing.
‘I have no doubt that we will see other localised outbreaks and we need to be flexible enough to deal with them as they arise over the next number of weeks and months.’
He added that the Spanish government has made clear that the country remained open for tourists, with infection levels low in much of the country.
Courtesy: (Daily Mail)