TUI AG, the German tour operator that also has three cruise brands in its portfolio, says the current crisis will drive further digitalisation of its business.

“We will be less capital intensive, and we will continue our asset-right strategy in our Hotels & Cruise business, which we launched in 2019. We will right-size our airlines and order book, alongside restructuring. We will divest and address non-profitable activities within our business,” the Hannover based company said in its first half financial year 2020 interim report.

“Driving digitalisation - we will accelerate our Group transformation into a digital platform busi-ness. We will expand accommodation only and seat only products as well as increase dynamic packaging options,” TUI AG said.

The group’s cruise operations that comprise the fully owned Marella Cruises unit in the UK and 50% stake in TUI Cruises and Hapag-Lloyd, reported a sharp weakening of  results in the three months to 31 March.  

Revenues grew slightly, to €243.2 million from €234.2 million in the same period last year, but underlying EBIT became negative by €22.4 million from positive by €59.4 million, year on.

In the six months to 31 march, revenues rose to €481.6 million from €424.6 million, while underlying EBIT narrowed to €24.2 million from €106.4 million.

“As the first half came to a close, many of our cruise fleet had curtailed their itineraries and docked as a result of global COVID-19 measures. A small handful of our ships continued with their planned sailings returning all passengers to home countries by early April,” TUI said.

TUI Cruises and Marella Cruises were more notably impacted by lost contribution, compensation costs from cancelled itineraries and rerouting costs throughout March. BY contrast, the luxury and expedition cruise brand Hapag-Lloyd saw less operational disruption due to itinerary type and saw earnings break even in the first half.