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Govt travel restrictions wipe out 8 000 jobs

30 Sep 2020
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The European vacations industry, already decimated by the absence of all travel during lockdown, is experiencing a financial second wave of its own as Northern hemisphere consumers cancel their winter 2020 holiday bookings and claim refunds due to the volatility of government travel restrictions.

London Stock Exchange-listed Anglo-German group, TUI, the largest leisure travel and tourism company in the world, has announced a ‘global realignment programme’, in which it will reduce staff by 8 000, drive down overheads and create an annual saving of €300m (R6bn) by the end of 2023.

TUI blamed the instability of government travel restrictions for the contraction in winter holidays, and said it expected them to prevail for the next few quarters. In August, the company said it expected to break even by the end of the 2020 summer season, but its view was later downgraded due to “volatile changes to travel advice” in Europe, which it says, discouraged bookings for Northern hemisphere winter holidays and created greater demand for refunds. It is now cutting its winter holiday programme to 40% of last winter’s offering.

Travel companies in Europe have lobbied governments to stop making last-minute changes to travel policies, causing sudden surges in cancellations and affecting consumer confidence. While countries like the UK have launched efforts to contain a second wave by the imposition of quarantine for people arriving from countries with increasing numbers, TUI has said it would prefer “a regional risk assessment policy being applied by each government rather than a blanket travel policy” and greater testing availability on arrival in destinations.

The UK Competition and Markets Authority last week ordered TUI to pay consumer refunds, after receiving thousands of complaints from people who had not received refunds from TUI within 14 days  for cancelled holidays, as required by consumer protection law when a holiday is cancelled for a reason outside the consumer’s control.

TUI owns travel agencies, hotels, airlines, cruise ships and retail shops.

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