Travel & tourism analyst at GlobalData, Johanna Bonhill-Smith, offers her view on Tui Group and its recent announcement that it plans to permanently reduce its overhead cost base across the entire company by 30 per cent following the coronavirus pandemic, potentially impacting up to 8,000 jobs worldwide.

She comments: “Potential job cuts have without doubt been spurred by Covid-19 as losses have soared. However, these cuts are part of a wider operation to streamline and digitise operations.

“Tui’s headcount has already decreased by 11 per cent. The global realignment program aims to reduce the company’s cost base by 30 per cent for the group.

“In a global survey by GlobalData, 48 per cent of travelers are spending more time, if not every day, browsing social media. After a long period of increased browsing time, post-pandemic this will likely influence travellers to book online independently, rivaling the traditional in-store agency model.

“Operators with high fixed costs such as in-store agents where rent has to be paid are already at a disadvantage in comparison to online travel agents.

“The future travel space may see TUI take a move to digitise operations moving gradually further away from the traditional travel agent to cut costs, but also effectively service the needs of the future traveller.”

For senior market analyst at asktraders.com, Nigel Frith, he believes it was only a matter of time before Tui Group announced its recent cost-cutting programme, given how much the pandemic has financially impacted them.

He said: “It was only a matter of time for Tui to reveal how much the pandemic has impacted them, and a £747m loss during the first half of 2020 is a considerable amount to lose.

“With restrictions on travelling, it’s no surprise that Tui is wrapped up in this too. With their second-quarter results revealed today, it was announced that the company are looking at cash-burn and possible ways to boost liquidity.

“In regards to Tui’s employees, it’s a shame that anyone has to go through financial difficulty, but to keep businesses sustainable, perhaps cutting costs by 30 per cent is ultimately the right thing to do.

“With no Britons currently taking holidays with Tui, it’s evident that people are still wanting to travel and people are still wanting to go on holiday – Tui Group will just have to find a way to make it as safe as possible to do so in coming months.”