Hays Travel loses more than £34 million

By Linsey McNeill
22/12/2021
Home » Hays Travel loses more than £34 million

Hays Travel lost £34.2m before tax in the 18 months to April 2021.

In the previous year it made a pre-tax profit of close to £5m.

The group had expected that its acquisition of all 555 Thomas Cook shops in October 2019 would propel its turnover beyond the £2 billion mark.

Instead, it’s earnings fell 34% from £1.1bn to £747.4m due to the impact of COVID.

It has been forced to close many of the 735 shops it had following its acquisition of Thomas Cook’s retail division, leaving it with just over 450.

However, it has also increased its number of homeworkers to 353 and bought Explorer Travel to operate its first franchise homeworking model.

At the start of the pandemic in March 2020, Hays began providing call centre services to a range of third-party organisations to cover the cost of running its travel business, which included paying staff to process holiday cancellations and rebookings.

It made £171m in the 18-month period, compared to £240.6 million in the previous 12 months, but it has managed to rebook £220m – or almost 28% – of holidays hit by the pandemic.

Over the past 18 months, the company – which lost its founder John Hays in November 2020 – has focused on cutting costs.

It said it had been able to save 44% of the jobs that had been at risk through a redundancy consultation process.

As its strategy was to rebook as many customers as possible, it was unable to fully furlough a large number of staff so Hays wasn’t able to take fully advantage of the Government Job Retention Scheme, but did receive some rates relief and business support grants.

Chair Dame Irene Hays described it as ‘the most challenging period in the history of the Hays Travel Group’, adding: “Not only were we severely impacted by the COVID-19 pandemic in March 2020, in November 2020 we lost our founder John Hays.”

But she added: “Throughout the pandemic we have successfully maintained existing customer confidence and on average are seeing over 50% of new customers booking with Hays Travel.”

The company’s Peace of Mind Guarantee, giving clients the chance to cancel or amend holidays free-of-charge up to 50 days before departure dates, helped deliver new trading sales, before cancellations, in excess of £1.5 billion.

The company’s headcount also soared from 1,919 to 5,229.

Dame Irene said: “The income statement and balance sheet have been severely impacted by the pandemic. However, I am pleased to report that we have managed to sustain a business with cash balances in excess of £96 million, with no utilisation of debt.

“Whilst the board recognises that the recovery of the business will be challenging, we are optimistic for the future, with the high vaccination rate in the UK. There is significant pent-up demand in the UK for overseas holidays, as customers in some cases, have now not travelled abroad for two years.

“The business is in a strong position, having streamlined costs and has the resources and capabilities to deliver wen the business returns and consumers are once again able to travel freely.”

The company expects some people to take multiple holidays in 2022 and beyond once all Covid-19 restrictions are removed.

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