Why On the Beach Group Plc share prices crashed on LSE?

Summary

  • On the Beach Group Plc said it will start selling trips abroad only after 1 September due to the uncertainties related to the coronavirus pandemic.
  • It would be reviewing its position after government releases its next international travel update, which is expected by May end.
  • Its shares tanked after the announcement, losing over 15 per cent in just two days.

The shares of On the Beach Group Plc (LON: OTB) crashed 10 per cent on Thursday after the travel retailer said that it would not sell any breaks for the period between June and August this year. In fact, as the international travel messages from the government remain uncertain, both travel companies and tourists are deferring their travel plans to the next summer in 2022. Recently, the UK government released a ‘green list’ of 12 nations for international travel beginning 17 May, which excluded most popular European destinations such as Spain, France and Italy.

The German-owned firm TUI AG informed that its holiday bookings for this summer (2.6 million) were 69 per cent down from their pre-pandemic levels in 2019.

Holiday firms and travellers are postponing bookings due to reasons including waiting for Brits to receive their two vaccine shots, Europe’s vaccination plans to stabilise, and directive of no any quarantine on returning home.

Also Read: TUI Stocks Fall as The Company Posts Heavy Half-Yearly Losses 

OTB summer holidays sell

The UK-based online travel agent said that it will start selling trips abroad after 1 September owing to the uncertainties related to the coronavirus pandemic. Earlier this week, the UK government had put most popular destinations on the ‘amber list’.

It said that it would be reviewing its position after the government releases its next international travel update which is expected to come out by the end of May. The firm informed that in the meantime, it has decided to advise its customers to look for bookings in the available options. Depending on the circumstances, the firm would help them continue with their holiday plans, modify it, or refund if it has got cancelled due to the new government rules.

Simon Cooper, CEO, On the Beach Group, said that 85 per cent of consumers do not wish to book travel to destinations on the red or amber lists. They also said that there is no clarity on what if the destinations on the green list change to amber or red in the coming weeks. So, holiday goers were in a fix to book even the green destinations, added Cooper.

The current lack of demand from consumers forced the online retailer to extend its off-sale holiday period to the end of August this year.

The company stock (market capitalisation: £600.14 million) closed at GBX 381.00 on 13 May, down over 10 per cent from its previous day’s close. On Friday morning at 9.59 AM, it was trading further down by 5.64 per cent to a value of GBX 359.50.

Also Read: Lens on Travel Stocks as Airline Chiefs Call to Restart US-UK Travel


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