TUI announced that it would cut its summer holiday schedules on March 25.
The Anglo-German-owned travel company has reacted to an increasing fear that international travel will be paralysed by a third coronavirus wave with demand dropping off a cliff.
Despite the decrease in demand average prices of holidays are up.
Here's why the company is cutting holidays and increasing prices.
Why is TUI cutting holidays?
The Anglo-German firm announced it is offering 75% of its pre-pandemic capacity in the peak travel months starting from July, down from a planned 80%.
Some 2.8 million guests are booked on summer trips, down 60% compared with the same point in 2019.
The drop off in demand comes amid fears of a third wave of Covid-19 are growing across Europe.
Germany and France have imposed fresh restrictions, while there is speculation that the UK could impose restrictions on people returning from much of the continent once leisure travel resumes.
Is TUI expecting a quiet Summer?
TUI chief executive Fritz Joussen told the company’s annual general meeting (AGM) “we continue to see a strong pent-up demand and desire to travel among our customers”.
He added many UK-based travellers who booked trips due to begin before May 17, the earliest date for the resumption of foreign leisure travel for people in England, have rescheduled their holiday for a later date.
“We look to the coming seasons with optimism,” Mr Joussen said.
“We’re seeing strong demand for next summer in the UK with bookings up some 120%, and May 2022 in particular is already up by more than 150%.”
There will be a “strong summer business in tourism this year” if coronavirus rules are relaxed, Mr Joussen said.
“The prospects of this are at least good in the United Kingdom”, he added.
Why are prices increasing?
On average prices are up 22%, due to a rise in the proportion of package tours being booked.
Joussen noted that the company had taken 180,000 bookings for July, August and September since February.
What are the current rules on travel outside the UK?
Under new Covid-19 laws in England and Wales, it will be illegal to leave the UK without a reasonable excuse from 29 March.
As such, this means you cannot travel abroad to Spain for a holiday, despite the country lifting its restrictions for UK travellers from 30 March.
The new legislation means that people living in England and Wales face an official ban on foreign holidays in law from Monday, and risk being issued with a £5,000 fine for breaking the rules.
The law now states that no-one may leave England to travel to a destination outside of the UK UK, “or travel to, or be present at, an embarkation point for the purpose of travelling from there to a destination outside the United Kingdom” without a reasonable excuse.
As well as a fine of up to £5,000 for flouting the rules, there is also a £200 fixed penalty notice for failing to fill in a travel declaration form, which includes providing personal details and reason for travel, for those planning to leave the UK.
The travel ban does not apply to those going to the common travel area of the Channel Islands, Isle of Man and the Republic of Ireland, unless that is not the final destination.
Exemptions apply for those who need to travel.