|Bid||312.30 x 0|
|Ask||312.60 x 0|
|Day's range||290.00 - 314.20|
|52-week range||3.66 - 1,090.00|
|Beta (5Y monthly)||1.50|
|PE ratio (TTM)||N/A|
|Forward dividend & yield||0.45 (16.85%)|
|Ex-dividend date||12 Feb 2020|
|1y target est||15.65|
(Bloomberg Opinion) -- We’re not going on a summer holiday. That’s the unfortunate consequence of the U.K.’s latest travel restrictions.Just as confidence was returning in the overseas vacation market, Britain advised against all but essential travel to Spain, and then late Monday added its Balearic and Canary Islands.Coming amid what would normally be the peak season for summer holidays, this is nothing short of a disaster for tour operators such as TUI AG, the world’s biggest package-holiday company, On the Beach Group Plc and Dart Group Plc, which owns Jet2.We are right in the middle of the so-called “lates” market, generally the period from June to the end of August, where people in Europe book their holidays anywhere from one day to six weeks in advance. This period can account for up to a quarter of all bookings and tends to be more profitable in a normal year, because prices are higher nearer to the time of travel.Until the weekend announcement, the signs of summer travel resuming across Europe were good. There was high demand for domestic holiday properties, such as those offered by Airbnb Inc., and some travelers were venturing farther afield.But fears of a second virus wave, with spikes in cases being reported in Spain and Belgium, are jeopardizing any nascent recovery. The U.K.’s travel guidance bodes ill for summer holidays across Europe.First there are the practical implications. In the U.K., when the government advises against all but essential travel, tour operators cancel holidays and customers are entitled to a full refund. TUI said on Saturday that it would allow those due to travel to all parts of Spain between July 27 and August 9 to cancel, or amend their holidays to another destination or time, and receive a full refund or credit. This cash outflow comes just as it and other operators were restarting their summer programs and spending on marketing, as well as making commitments for flights and hotel rooms. TUI is particularly vulnerable to the changing guidance on Spain, because this is the top destination for both British and German holidaymakers, who account for about half of its customers. The group would be in even deeper trouble if other countries such as Germany follow the U.K. in introducing travel restrictions to Spain. But the biggest effect of the U.K.’s announcement will be on consumer confidence. Even if it scales back the restrictions, the damage may have already been done.On top of the health risks, people may be worried by the fact that the advice on Spain came with little notice. Being unable to travel at the last minute, being stuck in a destination far from home and being forced to undertake a lengthy quarantine have all suddenly become possibilities again. That does not inspire confidence in booking a holiday. Worse, it increases the risk that jitters could spread beyond the peak summer season and into the autumn and winter holiday periods, which were looking promising.Some of the money that would have been spent on Spanish holidays could find its way into domestic economies instead. Staycations already looked appealing to Britons, thanks to hotels lowering their prices in response to a new VAT cut. People might also want to take advantage of the U.K.’s “eat out to help out” initiative, whereby restaurants can offer half-price meals from Monday to Wednesday during August.But according to analysts at Bernstein, the last time there was a spike in staycations — after Britain voted to leave the European Union in 2016 — only 60% of the money that would have been spent abroad found its way into the British economy.This year the shortfall in the amount repatriated could be even more severe, as far more people are shunning foreign travel and some may still feel nervous about days and meals out. There could also be a shortage of U.K. holiday homes available in August.So let’s hope the U.K.’s warning on Spain doesn’t portend a broader effort across Europe to keep consumers at home and protect domestic economies. Such a strategy may not work, and it would cast a long shadow on tour operators and holidaymakers alike.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- Anyone up for a beach holiday right now? The answer is probably a resounding yes, anything to escape lockdown and incessant worrying about the coronavirus outbreak and imminent global recession.But would you actually book one for this summer or even the fall? There the answer is more complicated, as it becomes painfully clear that our next vacations will be close to home and overshadowed by concerns about health precautions.There are the optimists: Almost three-quarters of the people who were due to sail in May, but had their dream cruise canceled by British operator Saga Plc, chose to rebook at a later date. The pessimists: More than half of Americans surveyed by Destination Analysts agreed their next vacation would be a “staycation.” Those organized souls who planned their July Fourth escapes before Covid-19 was upon us are playing wait-and-see. French hotel giant Accor SA has seen less than 10% of reservations for July and August scrapped. But it’s still bracing for occupancy rates of 25-30%, as opposed to 75%, when travel begins againWhat’s clear is that we’re all going to be expecting something different for our next getaway: hotels with detailed Covid-19 symptom checks, abundant hand sanitizer, rigorous disinfecting and bars and restaurants configured for social distancing.The $5 trillion global tourism industry has already taken a huge hit from the pandemic, and it’s not over. Figuring out how to cater to tourists and business travelers in this new era will throw up huge challenges for even the most flexible and deep-pocketed companies. The about 35% gain in the Stoxx 600 Travel & Leisure Index since March 18 looks overly optimistic.In the near term, consumers may be reluctant to crowd into airplanes or return to busy tourist hot spots. In response, European discount carrier EasyJet Plc said it’s likely to leave middle seats empty on aircraft with a three-seat configuration, at least when it first resumes flights. The cruise industry, a haunting symbol of the Covid-19 outbreak, is likely to promote smaller vessels, which are more easily adapted to social distancing, a robust on-board medical staff and promises to fly holidaymakers home at the first whiff of a problem. Flexible booking policies without any deposit may become the norm. If all this fails to tempt, then deep discounts will be necessary.This season may be a washout but there are some signs things will pick back up. Dart Group Plc said on Friday that bookings were still coming in to its Jet2 leisure travel business for late summer. EasyJet said winter bookings were significantly ahead of this time last year. Even if some of this may be rescheduling of trips that were canceled, it illustrates people’s eagerness to travel once again. To capture pent-up demand, tour operators including European giant TUI AG and Jet2 have launched their 2021 summer holiday programs early.It may still be a hard sell depending on the destination. For Italy, Spain and France, as well as New York City, the repercussions of having been the epicenter of the pandemic at some point may linger even longer. It took about 18 months for travel to Paris to recover completely after the harrowing 2015 terrorist attacks.With international flights grounded and foreign tourists unwelcome in most places, it’s impossible to say how soon we can start trotting the globe again. The big luxury and event-oriented hotels, such as those operated by Marriott International Inc. and Hyatt Hotels Corp., are more dependent on international travelers than their more downmarket peers. Companies will likely shore up offerings for domestic tourists. For example, Saga, which caters to the 50s-and-over crowd, already offers cruises around the British isles. This business could be expanded if customers are nervous about venturing further afield. In more thrifty times, people tend to seek out no-frills lodging. In the U.S., Wyndham Hotels & Resorts Inc., has the most exposure to the economy and mid-scale sectors, with brands such as Super 8, Ramada and Days Inn, according to Brian Egger, an analyst at Bloomberg Intelligence. In Europe, Whitbread Plc has the Premier Inn chain in Germany and the U.K., where 80% of its properties are outside of London.Airbnb Inc. may be a big beneficiary if tourists seek out private residences to avoid mingling with too many people in hotel lobbies, elevators or restaurants. The trailblazer for the sharing economy may provide more options in smaller towns or isolated regions. But as with hotels, people must have confidence in hosts’ hygiene standards.And as I have noted, some sectors, such as cruising, may struggle to attract customers other than their most ardent devotees. Carnival Corp., operator of the now infamous Grand Princess, said that as of March 15 bookings were down even for the first half of 2021. It’s hard to say just how bad and enduring the impact from this new coronavirus will be. For those companies that manage to adjust, they can expect to be rewarded with some positive long-term prospects, as more people enter the middle class around the world and an aging population has more leisure time. But it will take much more than pictures of idyllic getaways to woo them.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andrea Felsted is a Bloomberg Opinion columnist covering the consumer and retail industries. She previously worked at the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg Opinion) -- ↵The coronavirus will leave no industry untouched but the impact is particularly acute for companies that depend on prompt payment from customers to fund their businesses.In sectors such as car making and the travel industry, it’s common for companies to hold little inventory and settle with suppliers long after they’ve received payment from their customers.As a result they often have what’s called negative working capital: Their trade payables exceed the sum of inventories and customer receivables. In other words, they owe more to their suppliers than their customers owe them.When revenues are growing, this is a big advantage. Cash pours into the business which can be used to fund investments.Customer payments and deposits effectively serve as a free form of finance and that float gets bigger as sales expand.It’s certainly a very efficient way to run a business — Amazon.com Inc. excels at it — but negative working capital can make a balance sheet look stronger than it really is. That’s because the effect is reversed when sales suddenly slow down or shrink. Suppliers still need paying but there’s little new customer cash coming in. As a result, cash rushes out the door. This is what threatens to happen now that much of the world is cooped up at home due to coronavirus.“In periods in which our vehicle shipments decline materially we will suffer a significant negative impact on cash flow and liquidity as we continue to pay suppliers for components purchased in a high volume environment during a period in which we receive lower proceeds from vehicle shipment,” Fiat Chrysler Automobiles NV warned in its annual report. A rule of thumb is that French, Italian and U.S. automakers have negative working capital, while their German peers do not. A six-week production hiatus caused by strike action lowered General Motors Co.’s free cash flow by $5.4 billion.Optimizing working capital has been a key focus for carmaker Peugeot SA and boss Carlos Tavares repeated the trick when he acquired Opel/Vauxhall from GM.Like merger partner Fiat, Peugeot has now been forced to shutter its European car plants. If sales slump for a prolonged period, its 17 billion-euro ($19 billion) cash buffer could dwindle.Tour operators are accustomed to large swings in working capital: They typically get paid by customers ahead of the busy summer season and pay their suppliers afterwards.(1) Bank overdrafts can tide them over during the winter period when cash tends to be lower.Still, a sudden slowdown in demand can upset those calculations, as Thomas Cook Group Plc discovered last year. Customers delayed bookings, suppliers tightened credit terms and the U.K. tour operator went bust.Shares in rival TUI AG slumped this week after it suspended the vast majority of its travel, cruise and hotel operations and said it would apply for state-aid guarantees. The company has 1.4 billion euros in cash and available banking facilities but this is far exceeded by a deeply negative working capital position — at the end of December it held about 2.9 billion euros of advance payments from customers.The cash spring, once a big advantage for many firms, could be about to recoil. (1) They are however required to make pre-payments to hotelsTo contact the author of this story: Chris Bryant at email@example.comTo contact the editor responsible for this story: Chris Hughes at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.