TUI AG

XETRA:TUI1

Earnings Call Transcript 2022-Q2

[Operator]

Good morning, ladies and gentlemen, and welcome to the TUI AG conference call regarding the FY 2022 Q2, H1 results. [Operator Instructions] Let me now turn the floor over to your host, Mr. Friedrich Joussen and Mr. Sebastian Ebel. Thank you.

[Friedrich Joussen, executive]

So thank you. I hope I can still do these presentations in-person. So this is a long time since we met. And it's great to be back. So I have also talked to some of you before. And not only we are happy that we can do these roadshows again, but also we are happy that the business is back again. We have always assumed that it would come back, but you only are certain when you really see it. Now Q2 has been strong, and we will be talking about Q2. But even more important is what now happens in summer. As you know, you can lose a year in winter, but you cannot win it in winter. You can lose it in winter. We have not lost it in winter, but the summer bookings are in a way so important for us because all profitabilities in the last quarter, as you know. And therefore, we will particularly focus also in my part of the presentation looking forward. Now that said, let's focus anyway on Q2 first. We have been operating a 71% of capacity. 1.9 million customers traveled with us. Our load factor was 84%. 84% is, of course, very high when you think about that all our capacity was operating. Of course, you see it is not where it was before the crisis. I mean you would have seen something 90% plus before the crisis. But I will show you on the next slide, we had some bumps, particularly in the beginning of the quarter where Omicron was still present. We had restrictions everywhere because of Omicron hitting in December and late November. The bookings for particularly January were not so strong. But over the quarter, I mean, we saw that actually fading away. Now no restrictions are there. So 84% is good. But it's on its way. But it is good for the environment. Now that said, we half the losses. So that's very important. And if you had asked me just a month ago, I would have said minus EUR 400 million is maybe the right number, but the outturn of the quarter became stronger and stronger and stronger. And in some of my charts, I have now some ample numbers in to show you the trajectory and what we think about it. What we are all about is actually the business which is now the most resilient and the crisis has been the most resilient. Hotels & Resorts third quarter in a row positive results, amazing demand. When you look at, for example, the Caribbean, but also Cape Verde is very strong. So these are the destinations. Canaries also strong, but they markedly strong as Cape Verde and Caribbean, and we over-index there with our offers, have good -- very good market shares. So that has helped. Strong cash flow. EUR 1.2 billion operational cash flow. You will see the cash report of Sebastian. Of course, we paid back EUR 700 million and we will pay back soon more. Of course, that is all -- have needs to be negotiated. I mean, our liquidity position, more than EUR 3.8 billion. Again, here, enormous effects also because not only customers come back, but the prices are 20% higher. I mean when you look at the summer quarter right now, 85% book position, you will see it in a minute. With 100% -- 120% prices multiply the 2, you know that already the revenue for the summer focus is on pre-crisis levels, and we are just catching up now. So it's -- I mean, it will be -- it's almost impossible to assume on the revenue front that it will be not the strongest quarter in company history. So it's coming. So it's coming. We see the business being back, that's correct. So summer '22, we will look in a couple of minutes, we will look into the separate countries to give you some detail here as well. But cumulated catching up last 6 weeks were all weeks consistently above pre-crisis. So 115% last week, everything above 100% cumulated, we are now 85%. Half the summer customers, almost half, still to come. So that actually indicates how the summer could be. And particularly also in the U.K., we are still -- we are already and still have always been above pre-crisis cumulative. And that's also important because of half our risk capacity, when it comes to aircrafts, is in the U.K. So in the U.K., we are starting right now to really yield. So the systems come to grips. We actually don't -- we try not to overmanage demand. So we have in the growth 98%, so 100% because we just increased prices. I mean, it's clear, we don't want to underprice and overshoot on demand. When the summer has finished in the U.K., it's a little bit of a different tune. Here, we increase prices and start to yield up because there will be scarcity at them. That's our view. And then we are one of the few at least touristic operators right now in airlines who already say this year will be significantly underlying EBIT profit on a cumulated basis. So after 2 years of misery, we will be profitable this year again. Now I have a chart which is not very meaningful, but is nice and colorful. It actually says it was more red bubbles on the left and more green bubbles on the right, and that means no less restrictions. But it was influenced with restrictions. You see also Ukraine, which is, of course -- I mean, I cannot say how much we have Ukrainian people working in our company. It is enormous stress and the invasion is awful. But at the same time, for the business, it is not so matterful right now. We have a little bit less in Bulgaria, and we have a little bit less the Russian guests and Ukrainian guests in Turkey, but the other markets are so strong that they make up for it. Now let's have a look at the booking numbers, Hotels & Resorts. You see here on that slide that actually hotels have always been in terms of capacity over the last month is the dark blue are Jan, Feb, March. Gray I put as an outlook more or less and to show the trend. And you see that Hotels have been already remarkably stable. We operate at 90% of capacity. And that's almost a full program. The profitability in the quarter is actually a result of that. Interesting -- more interesting, I think, is now cruising. That was in January a 59%, 70%, 81%. It will be -- it is now in April 90%, we have all ships in operation. I mean now it's just a matter of occupancy and yield for some of the bookings are very strong. We had a little bit more difficulty with the ships than we had last year. You will see that also in the comparison when look at the quarters because we had operated last year all ships, and now we actually had to take out 4 ships also because of COVID. So particularly January and February was a little bit more difficult on the Cruise front. But now going forward, the bookings are strong as well, and April was already 90%. So then you see Musement, Musement is TUI's activities business. It's our star -- growth star, if you like. It is already in April 105%. That means we are stronger operationally not only in bookings, but also in revenues despite the fact that actually we have only 80% of customers, right? And you see a detailed slide later. So this is very strong. Markets & Airlines are catching up, and you see the 80% in April departed. We wanted to be close to 100% when it comes to volume for summer, and that is in reach. Now let's have a look onto the bookings. And I think now the interesting picture comes or the interesting picture has come. Net weekly bookings, left side. The light blue bars are cumulated. The dark robust are the weekly net bookings. And when we talked the last time online, end of Jan., beginning of February, we were at 72% cumulated. So minus 28% pre-crisis. And now you see the blue bars, they are all above 72%. So by nature, they go up on average then. And the last 6 weeks are the last 6 bars here, are above 100%. That means above 100% is above pre-crisis. Last week, 115%, right? And you can imagine that maybe even the 115% will be 117% and so on. Just look at the trend. You can make your own mind. But cumulative, we are now at 85%. So this is, I think, very strong. And when you look at the right side, you see these 85% are with 20% higher prices. And therefore, if you multiply 85% with 120%, it's above 100%. So the booked in revenue for summer is already today better than pre-crisis. You also see the Ukraine. This is a little dip in the middle here, yes. So we would have expected that this dip that wouldn't have happened if we didn't have the Ukraine. So then you would have a steady increase in the booking numbers here. Now one thing is important and that's clear. Revenue is not equal to margin. So the question is what will happen to margin in light of the inflation, of course, particularly fuel. Now the 20% higher prices can very well cover -- it's more than the coverage of the fuel at today's level, right? So therefore, I mean, whatever it will develop too. But today, the 20% are very coupling in the inflation risk. 5 million customers have booked since we met last time. Just to give you an idea, I think another 7 million customers to come for summer. So therefore, you see if you have 7-something million customers in the booking base at 85%, just if it stayed 115%, another 7 million automatically would take it to 100%, right? So if then the prices stayed at 20% or 15% or whatever anyway, anyway, okay, we dream a little bit. So now country levels. U.K., how do you read this busy slide? The U.K. is 41% of the booked position. That's the blue line under the U.K. So it is actually the biggest market. With that, 41% of our global booked position is in the U.K. Cumulative, they are above pre-crisis, 11%. In excess, so net bookings April was 98%. So it will dilute the 11% -- 111% will dilute down as we speak a little bit. But this is on purpose because that's what I said because we increased prices, right? So we don't want to be at 111% or 115% at end of season because it would be too much for our capacity. Our operational sweet spot is something, let's say, 105% or so where actually we maximize the price to get to this 105%, right? So that is a little bit different than in the other markets. Germany is now 28% of the booked position. That's top right. So it's the second biggest market. I have not included the cumulated number, but it is between 70 -- I think it's around 75%. So it needs some catch-up, but the net booking position for the net adds is now 135%. So -- and these are big numbers. Yes, so therefore it's increasing fast. Netherlands. Netherlands is 127%, 9% of booked position, 127% in excess, and it's cumulated 14% negative. So here, you will see that -- I mean, you can feel that prices will go up. I mean the prices are already very good in the Netherlands. This is also to the scarcity in skipboard, upboard and so on. So the gateways are narrow. So you can feel that the prices go up because we don't want to be at 127% in the passengers to go. So there is an enormous potential to create profitability. So as I said, in the last years, we always had overcapacity and we could not fill the capacity. The aircrafts were on the ground. And now we are -- our systems, that how it works, when you remember first the volume than the price, right? So that's how it works. So demand, demand, demand, yield system, the systems go "tuk, tuk, tuk, tuk, tuk" and actually increase prices until the demand is to create -- to cover the risk capacity. So in Netherlands, we are at a good point. Belgium is a mix a little bit. The package business is very strong. It's more like the Netherlands. We have flight-only business, which is more short term. That's the reason why you have the 98% here, but it is, in principle, the same model. And then you have the Nordics. The Nordics is only 3% of booked position. You see it small, but you see the Nordics is a little bit the problem child. It's an amalgamation of different markets. Denmark is pretty much like Germany, Sweden and Norway, are lagging behind. Okay. We need to buckle a little bit. And now in -- as you see here, April, I think when we ended April, we were more at 80-something. We started April a lower number. So also there you see a catch-up, but it's a little bit late. Fortunately, it's the smallest market, which is a little bit late. So this gives you a little bit of flavor. I thought you were interested in that. Now one thing which -- the chart I like is not direct. It's not a financial slide. So hopefully it doesn't bore you. But you see the web visits on U.K. and Germany, right? And the percentage of the market share is on the web visit. In the U.K., that's how you read it. We have 45% as web visits, the second competitor has actually 28%, you might guess who that is, right? Now in the U.K., we are already 70% online. Okay. If I take in the box, it actually grows. Online grows a little bit faster. Retail we have taken it out. We talked about that. The interesting thing is now Germany. Because in Germany, we are 59% of web visits, right? So our market share average is 30%. So we are over-indexing on that visit almost a factor 2. And now in Germany, we have much more retail. But the growth of online is enormous, right? So the growth of online is much better. So we talked about the digitalization and the effects. One of the digitalization effects that I think we will be doing pretty good when actually more and more traffic comes online. We are the only people with a meaningful web visit in web page in Germany. The second and third and fourth are more going independent travel portals, so Check24 and the like. So these are independent portals. With us is almost all tui.com, right? And our app and also the Hotel brands. So the online, this is all our website and app. That means mobile. Mobile is increasing. That's also important because their distribution costs are 0. That's a good part of our service. So this is good. It's a view into the future. So then a couple of remarks on the current trading environment. As I said, Hotels are very strong, particularly Greece is enormous. Now when it comes to summer, there will be scarcity everywhere. We expect strong yields and the catch-up, nothing will be empty, I would say. I mean, Spain is lagging a little bit behind, but you see also now catching up because Greece is so full. Cruises, we have now all ships in operation and the bookings are building steadily. The rates are high and very healthy. So I think for -- particularly for Q4, it will be a very good business. And Musement, I have a separate slide and maybe I explain that in a separate slide. Now when it comes to vertical integration, is that still something which is important? I mean in the crisis, we have been directing traffic to our own hotels. Now also in summer, we are building the business, our own hotels first. So therefore, vertical integration is important. I want to say that in some of the destinations, we already started to do shared hotels first, because scarcity means you can go out of stock at a certain point in time. And therefore, we start to reserve, particularly when you look at Greece, we keep some of the exclusive capacity in order to be able to sell at high prices in summer. So this is really the business is -- it's good that the business is normal. So it is good that the business is normal. I have actually included a slide to talk about occupancy average room rate, but also RevPAR, so RevPAR available room, revenue per available room, and you see the 3 columns, '19,'20 '22 -- Q4 '21, '22 not Q4, '21 Q4. And here, you can see in the crisis that actually we are getting out of the crisis. Q4 '21 was the first profitable quarter in our hotels, and you'll see why. And because the light shade is actually a competitor benchmark in the respective destinations. So the room rates, the occupancy as well as RevPAR is over-indexing. And you see also the curve out of the crisis, how it started to work with Q4 '21. So this is already a bit of history. Now that actually encouraged us to actually say asset-light. We have actually launched Blue Horizon, the plan to build -- to operate 300 Blue hotels. We are now at 100 Blue hotels, and the interest is very high, investment vehicles through the hotel funds. The first one launched, very high interest, good interest, the spread -- the global spread of the hotel program, we want to become the highest and the growth -- the biggest leisure hotel operator in the world, and that is the plan. And the reason for that is actually this, right? When you are part of it, then you are better off than actually if you are independent. That's the idea because channeling demand and so on. Okay. Now this one is not the future. This one is reality. Total EATs, so excursions, activities, tours sold before the crisis and now, and you see H1, so comparatives. H1 we did growth of 25%. And large part of it is that 30% of the excursions sold are third-party right now. And that's the fastest growing. It is the bookings and the like, right? So we are everywhere in the booking side. So when you book a hotel, look at activity, you book us, right? Like label, sometimes right, sometimes original. But also the 70% of the 1.7 billion is today higher than the 95% of the 1.2 million before the crisis. And that is because of the digital distribution channel. And this is despite the fact that in the first half year, only 70%, or even less than 70%, of customers traveled, right? So we have more excursions sold on an absolute basis despite the fact that actually only 70% of customers travel. And that shows the dynamic. And that is the reason why we believe that this business will be the fastest-growing business in our company. Good. That said, I would like to leave it for a moment. I'll come back with a summary slide, but the serious stuff, which is actually the numbers, Sebastian will tell to you.

[Sebastian Ebel, executive]

Thank you, Fritz, and a warm welcome also from my side. I'm really happy to be here. It's the second time after -- to London after the pandemic started. We were here in November and now here, and it's good to be back more than a normal reason. We are very glad about the results. Revenue increased to EUR 2.1 billion in the first -- in the second quarter '22. I think the comparison to quarter 2 '21 is not so meaningful. I always like to look against '19, and we were in the second quarter around 70% of '19 revenues. And that, I think, gives a good indication how to interpret our results. Underlying EBITDA minus EUR 123 million. Depreciation, amortization, EUR 200 million, slightly going down, which is the result of a very rigid investment policy, which we want to keep and will keep for the future. As Fritz said, if we do invest, we do it through vehicles like the hotel fund, which leads us to an underlying EBIT of minus EUR 330 million, which is almost half of what we had seen last year's comparable quarter. And it's just EUR 100 million worse than the Q2 of 2019. Adjustment small part half is -- the purchase price allocation half is SDI. The realignment program goes very well. We will achieve 80% of the benefits this year. And it shows that this cost reduction really supports the bottom line, the P&L. EBIT, EUR 343 million minus. Net interest expenses around EUR 123 million. We had given a guidance of -- for interest, EUR 380 million -- minus EUR 380 million and EUR 420 million. We will be -- we are in line with what we had predicted. So this fits very well into what we think will be the outcome of this year, which brings us to minus EUR 467 million EBIT. There is an income tax benefit of EUR 145 million that takes into account the improved economical situation of TUI, which brings a group result to minus EUR 321 million, which is less than half of what we had the quarter before. And this is an EPS of minus EUR 0.21. If we look into the different segments, we -- as Fritz said, the Hotels & Resorts area, the third quarter -- third consecutive quarter profitable, with an occupancy rate of 65%. I think that shows quite nicely what we can achieve if the occupancy, which normally would be around 88% up to 90% in winter, and we were able to achieve a positive result with the 65% occupancy, which will grow now very steadily in the coming months through the excellent booking development and steering into our own asset. Cruise, as Fritz said, has been more difficult. You probably remember that there was the fourth wave, which, for the first time, led to the situation that we had to cancel cruises in January till the middle of February, and that had 2 impacts. One, people couldn't travel and second, bookings were slow. And luckily, this is now over all the ships are in operation, and we have seen since, I would say, 3 to 4 weeks, a very strong booking because people have, again, trust in the product. And what is also quite interesting, prices are very stable and they're stable. They can be stable because the cost situation is stable because what we don't see that's a little bit different to Markets & Airlines, strong cost stability. That's why we think that we will catch-up and be on normal levels in the fourth quarter, but it has been a tough quarter. Therefore, the losses had increased by EUR 20 million to EUR 74 million. TUI usage of the app is very, very high, 80% of all -- 90% of all customers. And through this, they get directional sales. We get directional sales opportunities, which people take. And what is also good that the third-party business, which means new customers for TUI to whom we can later on also sell other products, is doing extremely well with very strong growth. Markets & Airlines still a difficult quarter, but strong improvements in all 3 major markets. The U.K. where we have the biggest fleet, the buildup of the fleet was effective and we reduced the losses from EUR 221 million to EUR 181 million. Germany, significantly better from EUR 123 million to minus EUR 21 million. This includes a EUR 50 million cost compensation by the state program of the German state. And Western region -- but also, if I would add this, which was quite interesting Central region, we would have been better than the '19 results in Q2. And Western region also improving. And as said, as Fritz showed, month-by-month, there were significantly improvements. So as January had been difficult, February became better and March had become really better, although Easter was not in March, but in April. And this altogether led from minus EUR 633 million loss to EUR 330 million. And as said, the biggest contributors were Hotels & Resorts and Markets & Airlines with a small downside in Cruises. Cash flow. We had a very strong working capital intake. And this actually has 2 reasons. One is prepayments of customers, so getting more and more customers helped the balance, but also the other working capital measures we have taken to optimize cash-out and cash-in worked very well. And I think that's something we are really proud of, and we still see some opportunities there. On the working capital, we are on the -- sorry, on the customer prepayments, we are on the same level as '19, although we only had 70% of the business. So we are looking forward for the future months. This led us with the other impact like interest EUR 78 million outflow, pension contribution EUR 39 million outflow to operating cash flow of EUR 1.325 billion. Net investments minus EUR 83 million. As said, we are very cautious in taking investments. We are, of course, taking all -- we are doing all what is necessary for safety -- health and safety. We invest into IT, which is really necessary to transform further our business. And RIU is also taking the opportunities when there are good opportunities. They are not part of our cash pool. So that's why these investments will be in this number, but it will not impact TUI cash, which leads us to a free cash flow of EUR 1.242 billion, which we used to reduce our financial debt and to slightly reduce the finance lease liability. So I think a very good picture also if you compare it with '19. At the moment, we have EUR 3.8 billion. This last number was EUR 3.3 billion. We were able -- as showed a cash inflow of EUR 1.2 billion. We handed back credit lines to the German government of EUR 0.7 billion, which brings us to EUR 3.8 billion facilities -- cash and facilities. And the EUR 700 billion, we paid back the EUR 170 million the secured RCF, the EUR 91 million the bond portion of the EUR 150 million WSF bond. And the remaining EUR 414 million KfW unsecured RCF, what is also now quite promising. We'll reduce almost on a weekly basis, the remaining part of the debt we have with the private banks. So I would estimate that within the next couple of very few weeks, we will also be in a position where we haven't drawn anything from the private bank revolver. Of course, after summer, October, probably later in November because I think we will come very well through the summer, we will need some of this facility again, but in a small order of magnitude. If we look at our balance sheet, we were able to reduce the net debt by EUR 1.1 billion to EUR 3.9 billion. In the half year, we had the capital increase and we had the working capital inflow, which led to this strong free cash flow. If you look at the situation today, of course, the 2 silent participations of the German state are fully drawn. The EUR 420 million silent participation, one, that can be converted into equity by the German state. The EUR 671 million we have to pay back. We want to pay back as early as sensible and both are accounted as equity. The KfW RCF now is not utilized anymore at all. And the cash RCF was 31st of March was used with EUR 900 million at the moment. This has reduced now to EUR 700 million, and the remaining part will be reduced within a very short time frame. Lease liabilities reduced by EUR 100 million. Although these are only lease liabilities, it's very clear that we want to optimize this as well. And we did that by EUR 100 million in the last quarter despite that we are renewal our fleet, which helps us to reduce fuel consumption. Hotel leases are in the same order of making to a slight reduction and ships also very small reduction to it. What are the main task, of course, to drive operating effectiveness to further improve profitability. I think this is very clear, and to look and to oversee the cost reducing realignment program, as said, it works very well. We have put all measures into action, and this will give us 80% benefit this year and the remaining part beginning of next fiscal year. The digitalization is very important. Fritz mentioned that the app, the more we can book through the app, and that's a very clear trend, the more we reduce distribution cost because it comes along with no distribution costs, maybe 2% or 3% IT and customer service cost compared to 15%, 16% if you sell it through other means. Generate cash flow. I think that is something we have done well, but there's more to come. It's a continuous work, and it's a very good alignment between the operating units and the finance department. Otherwise it would not have worked. Disciplined CapEx management, that is very clear. And if we want to invest like the TUI Blue concept, the investments are done through the hotel fund or within RIU to make sure that we further reduce our debt because that's the first prerequisite for a healthy balance sheet. We are constantly looking at opportunities. You know that we got authorizations at the last February AGM. And there we look opportunistic what could be sensible and what we would do. At the end, if we reduce the credit rating that would have another strong impact on a lot of things also on collaterals, which we have managed quite well. But with the overall improvement of TUI, this would be also a significant step forward. So we are really in a good flow, very optimistic when it comes to summer, but a lot of things to do to support this good development. We are cautious in what we do.

[Friedrich Joussen, executive]

Thanks, Sebastian. I think you said it very well. I mean, sometimes there are other times when the things go bad and then everything goes bad. You have no prepayments, you have high collaterals, you have a bad credit rating and it goes like this. And you see now the spiral actually different. I don't know any week that we don't overachieve what we expect, and we have now through the high prices. And I mean, working capital in, which we -- as Sebastian said, I mean, we have 70% of customers and already the working capital, if we had 100% of business back. So it is interesting to see the spiral in the other way. Let's keep the ball rolling. What have we done? Nobody wanted to have the crisis. But as a management team, we said, let's say, for the company, that's what we did the first phase. And then we said, what kind of transformation can we do in order to take advantage of the crisis once it's over. And we actually base that on the 4 pillar, as you know. So I don't want to repeat it too much, but it's a mix of cost and growth, for example, tours activities, but also digitalization being more relevant to more people -- to sell more stuff to more people and so on and so on, be better in yield, one-to-one marketing, mass individualization and so on I talked about. Also decoupled growth with direct investment, that's what actually the third box is, right? So that we want to do 300 hotels. Of course, we cannot invest 300 hotels so -- in respect to Blue, but also just cost saving, I mean, realignment. Cost savings without negative effects on quality and growth. So that was, again, you could say the realignment is not only a restructuring is realignment because it's going in line with digitalization, right, the processes more automated and so on and so on. So we have done these things. And actually, they result -- they produce results today, but the dark blue box on the right, that was what I said last time. I said, deleverage 3x, that's our target and not too far in the too-distant future, and you see net debt coming down right now. So the first effects are there. Still work to do, that's clear. But I think it's in reach. And then also sustainable, the profitability will be in our company higher than it was pre-crisis because the 4 actions taken will produce these results. And we see that. I mean, when I just look at Germany, Germany was always a market with relative profitability below 1%, and we see all the restructuring, digitalization, the effect it takes already now. Of course, I think it is clear. But on top, we have now said based on the summer bookings and how the summer bookings came in and the 5 billion additional bookings between end of Jan and now, we can definitely say that we will be already profitable this year, significantly EBIT profit this year when you take the full year. And that is also something I would say -- we need a strong summer, but that we will see a strong summer. So that's something we'll -- more or less we left the crisis behind it, now we see the bookings and the spike will hopefully go in respect. Okay. That's it from our side for the time being. And now I think we will do the questions in the room first. And then I think also, right, we will have questions from the web, but the room is first. Okay.

[Friedrich Joussen, executive]

Jamie, you have the tradition of 3 questions and being first. Why don't we take you first?

[Jamie Rollo, analyst]

Jamie Rollo from Morgan Stanley. Three questions, please. First, in terms of the sort of guidance for significant profits, you talked about record revenues in your fourth quarter, which sort of makes sense mathematically. Are you also expecting record profits over the summer and should we factor in any of the additional German support and the hedging effectiveness, I think together EUR 90 million in the second quarter? Second question, are you seeing any signs of any consumer slowdown? I've seen some comments in the U.K. from some agents talking about deferrals or final payments and obviously, your U.K. booking numbers weakened albeit that's partly mathematical. And then finally, you're still talking about using the capital authorization received at the AGM, which I think is essentially additional shares. Could you talk a bit about that? And also any update on the potential for the German state to convert?

[Friedrich Joussen, executive]

So we don't do guidance. I mean we said -- should we do guidance. I mean, what we did right now is more or less write down what mathematically will be easy to guess yourself. I mean when you have 85% -- when we -- customers to come are now 100% when crises are today, 120, I mean, it's much mathematically easy to just do a calculation and say a spreadsheet, what will it be. On the profit, we don't do no guidance on a per quarter basis. But one thing is clear, the prices in summer are very strong. I mean, the prices in Q3, you are not so strong in our industry because it's not peak season, but the prices in summer are very strong. And we also said they will cover -- there are more than necessary to cover the fuel cost inflation. And the scarcity will actually -- I think the scarcity will provide a basis of an environment where we don't need a strong yield down in prices in the lates business because, I mean, with -- I mean the prices come because people mainly go a day longer on average instead of 8.5 days, 9.5 days. That means 85% of customers burn 95% of beds. And that actually says something about -- in reality, 85% is not 85%. 85% is already 95% when it comes to capacity. And that's -- an environment where I would expect that the prices are strong. Now on top of that, we have the fuel price volatility. But I also -- I mean, we have the discussion in the executive committee. I mean, could fuel price be $130. But in reality, what we see -- what we saw in our last days from $110 to $100, yes, it could be also $90. And we are covering now $105 to $110 per barrel. So let's see where we end up. Now on customer demand, we have -- the only significant point I can -- I mean, long term or midterm or longer term when it comes to next year and the customers have paid the first electricity or energy bill in the winter, we will be -- there will be a correlation to the general inflation and the perception in the market and so on. At the same time, we have very low unemployment today everywhere. I mean we have scarcity of people working and so -- I mean, we have a good elasticity in the -- in our societies. And I think also, at least from the only market where we have opened the winter business right now and where we have a decent booking is U.K., and it's very strong. So the winter business -- the bookings are very good. And maybe -- there was a discussion maybe that is also at least from the volume perspective, the Thomas Cook is now coming in. I mean the Thomas Cook effect which we had not seen in the pre-crisis numbers because then Thomas Cook was still around in '19, and some where the 20%, 25% market share needs to go, right? So the volume is good based on the risk capacity, the prices are good. So at least from today's perspective, I don't see a lack of demand or something falling off the cliff. Sebastian?

[Sebastian Ebel, executive]

Jamie, on the governmental support, there are still some small programs available related to the Ukrainian situation. That will come into place, it will be a small 1-digit million number. So we don't expect something really big. The more difficult question is the -- or find an answer, the question is easy. To find an answer is the hedging ineffectiveness because it so much depends on the actual fuel rate. The only good thing in this -- I mean, I've learned so much about IFRS 17, which is commercially not fully understandable, but it is as it is. If you have a high fuel price, you tend to have a positive impact here and a negative impact in the business or the other way around, and that's why the impact is a little bit balanced out, but that's only -- we have modeled different scenarios, but it's very difficult. On the capital outstanding authorizations as we say, we look at opportunities if opportunities would come up, we will consider. It's a little volatile market environment at the moment. So -- but as I said, if there are opportunities, we will look at it. And conversion of the silent participation 1, it is completely the decision of the German state. We have no information if and when this could happen. So -- unfortunately, we cannot say more.

[Friedrich Joussen, executive]

But it will happen. The benefits are so high. I mean, to the state, they have monetized EUR 280 million of interest and charges. And if they converted, I mean, 420 times 1 and then compare whatever share price is right now, I mean they need to convert. They have indications that they don't want to stay a long-term shareholder. I mean that's also very clear. Now is a question of timing. And we will see, not in our hands.

[Pranavi Agarwal, analyst]

Pranavi Agarwal from Bernstein. So 3 as well, please. So the first one, summer 2020 bookings still 15% below 2019. I know the last 6 weeks have been a lot stronger, but that still lags peers. We've posted some really strong numbers. Booking.com said April was 30% above 2019. On the Beach said that the sales in February were 50% above 2019. So why do you think that TUI is lagging here? And what do they need to do to really accelerate into the summer to be able to kind of match that euphoria that peers are also reporting. Then on my second question, on Musement. You said this is the fastest-growing business. Kind of what are your long-term thoughts on profitability for Musement? And then also TripAdvisor have said that they are thinking of doing a sub-IPO or fire tool? Is this something that you've considered or something that we can expect some -- an announcement on at some point? And then on my third question, there was a big working capital inflow in Q2. How much of that can we kind of expect to be brought forward into Q3 and kind of how to think about free cash flow for the rest of the year?

[Friedrich Joussen, executive]

Okay. I'll leave the last one definitely for Sebastian because that's heavy lifting. So -- but the first ones are clear. No, we have a yield business, right? We don't have a trading business. That's important to be understood. Okay. So yield businesses don't want to have 120, 130 and so on, Yield business, you have risk capacity, and then you yield out the risk. If you have a trading business, you sell everything you have and then you say more hotels, right? If you have a yield business and you have a risk capacity and you start to overachieve targets, you start to increase prices. I mean, if you have one hotel or one airline and so on and so on, you don't say, I want to sell more, you start to increase prices. It's a very different business. So therefore, it's good if independent trade-offs have higher numbers because that shows demand is there, but then we start on our own business, our whole hotels to increase profitability. I hope that makes sense, right? Yield businesses are not trading businesses despite the fact that it is a city and whatnot. The second point I want to make, we are very happy with our TUI activities business. And it's not lacking investment. We have an upstream consolidation. We have an upstream consolidation strategy. We don't strive for enormous growth in the independent market. I think it needs to be proven in the independent market that you when -- once you have reach, you'll get it into recurring reach, right? Because it is -- none of these businesses are particularly profitable. We are profitable because we have a native reach, because we have 21 million customers who all come to our platform. But in the downstream business, so from platform to customers, it remains to be seen. And our strategy is 1 million things to do. The consolidate off activities around -- and then it also remains to be seen how much of TUI in the future will be actually activities led. And maybe -- I mean, it would be one strategy to make it independent. It could be one strategy to transform the company into activities led business. So in 5 years, maybe TUI is even more important part. Particularly as in the marketing, you see that more and more customers buy activities first and then complement it with whatever they buy on top. Activities is the new luxury holiday they say, right? It's more important than what you do then what you own. So it might be that the new TUI, at a certain point in time, is even more activities led business. So therefore, I'm far off to consider IPO-ing that business. I mean we will grow that business now fast. And you have seen that -- and it's not a lack of funding. We don't need other investors. Viator is not profitable. I mean -- and TripAdvisor, I think IPO-ing it, is now to try to separate the business and make it somehow to unleash conglomerate discount. And so I mean, I've not talked to the guys, but when I look from the outside, I understand what they do. But that is not our strategy, right? So Sebastian, you wanted to say something.

[Sebastian Ebel, executive]

Yes, 2 things. One on the Musement thing. Customer acquisition is -- costs are high. And the good thing is that we can supply our own products at TUI and we can sell other products. So what you normally see, you have to invest in any new customers and then you lose the customer, you have the investment. It's a little bit very different to us. And that's why the profitability of Musement is doing so well despite we are putting a lot of money into growth. On the growth numbers, the EUR 115 million is a blended number. This is important to see if we would only look at the package growth. We would be not -- we would have a by far better one. What we did, we reduced significantly the seat-only part of our business to optimize profitability. And as we look very stringent to market shares every week, we can see that we are doing very well on these core products where we see strong profitability. On the free cash flow, we don't give any guidance. We just can say that this is the main focus of the finance team. We look at this every day to optimize it and not by delaying something which comes back the day after tomorrow, but by structural changes. And if we do well, we will see some further benefits.

[James Clark, analyst]

James Rowland Clark from Barclays. I was interested in your comment earlier about ASPs and capacity, just bang in the ASP figure times of buy capacity in your revenue potentially. You said before that there's a mix in that ASPs between package, U.K. and underlying. Could you outline the underlying pricing growth there, please? And whether that's -- whether you're able to cover inflation with that pricing growth? Secondly, just on bookings, you're running at about 10% ahead in the last 6 weeks. By when would you expect to catch-up with the typical bookings curve, so you're in line with '19 levels? Would you expect by early August that you would be caught up? And then finally, on the cash inflow of EUR 400 million in the last 5 weeks. Is there any EBIT positive in that number? Is that all working capital?

[Friedrich Joussen, executive]

So on the average sales price, all of that is today or not all, but most of it -- by far, the most of it is actually the longer stays. So it's not related to price or cost. And also the mix, more 5-star and 4-star more long haul than short haul. So you have this. Now that said, this has anyway a good margin impact because the incremental cost on these -- incremental revenues of cuts much lower than the total -- the total cost position, right? So -- and it has a benefit that today, you don't see the price effects. But in future, you see the price effects because, again, in the yield system, when you are running ahead, you burn more beds than you have. So then the system is more full. And then, of course, the yield systems say don't decrease prices, right? So the yield system actually keeps prices at a higher level. So I would expect that in the lates business, so the closer we get to actually now the point of departure, we less -- we need to reduce prices, right? So the less we will have scarce supply, and therefore, the price quality for, I would expect, for the full summer season will be very high or very good. That said, for future season might be different. I mean we had -- Sebastian might want to talk in a minute on maybe also the contracting with the hotels and so on because right now, we have fixed contracts, and we don't see the price inflation, but who knows in the future, that's one of the things we spend our time on. Now one thing, I want to on the booking curve itself. The bookings in the last 6 weeks have been above 100%. They need to be above our cumulated status in order to move the cumulative status up, right? Even if it was 90%, it would move up. Now we are now in the privileged situation that we have 115%, when 50% of the customers still come and you have 85% in base and 115% in net adds. At the end of the season, it will be right? Now the 115% have not been 115% in the last week. They have been 110% and they're coming from 90% and so on. There's no science around it, but it's imaginable in the short-term booking environment we are in right now, that the closer we come, the 115% will be 120% or maybe 125%. When we closed the winter, we had sometimes weeks with 200%. Now the volumes are smaller then. The volumes are still now net bookings 300,000 per week or even higher. But of course, the relative booking advances in a short-term booking environment will increase the closer you get to the main booking months and the main booking months in our system is July and August. There you have the highest prices, the highest yields -- and here, we are also very, very well booked. Yes, so already today, and therefore, I think the closer we come, the more you will see maybe 120% or so. And then automatically, the cumulative position will build. I hope that explains it. And -- but on net adds, we are, since 6 weeks, bookings coming in, we are above '19 levels, right? So the activities -- when you look into the store, when you look into our websites, we have higher traffic than we had pre-crisis. We have more conversion. We have more bookings since 6 weeks. Sebastian, maybe you want to take.

[Sebastian Ebel, executive]

Because you were asking profitability -- cash flow, I think if you look at the '19 numbers, just to help you a little bit to do the calculation, we had EUR 200 million in the third quarter, plus -- and EUR 1.2 billion in the fourth quarter and the 200 million would mean that there is more profits in the June month than in April. So the profitable part of the cash flow will come now in the -- start in the next weeks and then really go up in the end of -- middle of June.

[Friedrich Joussen, executive]

And actually all profits, but that is normal our Q4.

[Sebastian Ebel, executive]

Cost inflation, that is a very important subject. We look at it every week because there is normally a correlation between cost or currency changes and booking pattern. I mean, fuel, you can calculate what today's prices mean compared to when the -- when the barrel price was $65 or 17%, that may add up to 1 or 2 percent points higher prices for the package, similar we have seen for the hotel. So the hotels really have been very cautious in increasing prices. It hasn't impacted this year, but we normally go for a 3-year contract. But the interesting thing is we now look at London hotel prices, I mean doubled. We were in Miami last week. They tripled. It's unbelievable. Hopefully, it will go into profitability of the hotel. Yes. The good thing is we have 30% of our own capacity, our own hotels, there we would directly benefit from higher prices. And with the other remaining ones we try to have such a relationship that we can make sure that they get the apps -- the maximum occupancy rate, so that their profitability comes through having 90% with TUI and only 80% or 75% if they do it on their own. And the last point is, of course, the realignment program has been very successful and to be even more cost conscious, especially on the distribution side is something we have to do because there is still a lot to get to offset this.

[Alex Brignall, analyst]

It's Alex Brignall from Redburn. The first one on your summer capacity. I think there's a bit of confusion between volume and price. I think bookings plus 10% of volumes. So I don't worry about being behind, I think, On The Beach also was a sales number, not a volume number. So I think it's broadly in line. But just in terms of your summer capacity, I think it's going to be about EUR 14 million. Is that right, against EUR 16 million in 2019? So that would imply that full for what you're currently planning would probably be 88%, give or take. So should we expect the cumulative to get to 88% in order to hit what you currently have scheduled? Or will you just add capacity to get to 100% as you do. So that's the first rather long question, sorry of that. The second, on the asset-light hotels, it's obviously quite a big statement to say that you expect to be the biggest asset-light leisure hotel business. So could you just talk about the time frame on that? Obviously, you alluded to conversions and independence. So obviously quicker to convert. And maybe the economics of what kind of fees you could get on a single hotel. I don't know if you can help at all on that, would be fantastic. And then I think you slightly talked about the fort on hotel purchasing economics. Obviously, what we've seen this time versus 2019 as we don't have Thomas Cook and they were probably the most aggressive buyer of inventory back then. How is it working with your partner hotels in terms of the pricing that you're getting and the prices that you're able to buy your inventory at and therefore, the margin that you then make on that?

[Friedrich Joussen, executive]

Okay. Maybe I'll start. I mean, particularly, I think, on the economics of our hotel fund, these are something -- Sebastian, I would like to give to you not to make mistakes. So -- and the economics are very good. I mean, we are different sources of revenues. We are scouting the hotels. We are contracting the hotels. We are committing. We are distributing to deliver on the brand and so on and so on, and it's different revenue flows. And it's quite a profitability for non-investment activities, right? So in summer -- summer is already starting now. That's the reason why Q3 will be not 100%, right? So -- but in -- but in Q4, we will be 100%. And we might be even more than 100%. I mean that's when it comes to volume, when it comes to volume. Why? Because Thomas Cook is not around, we are talking about the summer capacity, 100%. We always talk Markets & Airlines and therefore, you know that it might be above 100%. And that's what Sebastian always said, we might be conservative, and I think we are seeing we potentially are conservative when it comes to Q4. And you are right. We are talking when -- that's a very good point, volume versus value. So when we have 100%, we are already -- we are 115%, then you'll need to multiply that 120% because packs price equals the 130%, whatever, I mean, if that's the confusion item. Who cares? At the end of the day, it's all good. Now with the capacity, when do we add capacity, we usually have -- we are now in the process of firming up our capacity. So particularly when it comes to airlines, we are now, particularly on the U.K., we think we will be more than 100%, and therefore, we are firming up capacity. But that said, on the risk award anyway, we are a little bit more careful that we potentially would be because profitability is for Q4, the name of the game. I mean even if we lost a couple of market share percentage points, we want to be profitable. And this comes back to something with the hotels. We -- as Sebastian said, the hotel prices will go up. Now we have contracts, yes, that will go up. I mean -- but at the same time, my experience since I'm now more focusing on the hotel business TUI Blue and so on and so on. One of the bigger levers in the hotel business is actually pricing. And there is a bias in the hotel business and maybe in all risk businesses that you for quite a while, shy away from the risk to increase prices because you want to create occupancy first, right? So the businesses have now lived with empty hotels for such a long time that this bias has actually -- if at all, is actually bigger, right? So hoteliers -- when we talk to hoteliers incredibly happy that the hotels are full. And we are bringing guests. Yes. So I don't know too many who actually say right now to us we have to increase prices quite to the contrary, many of them are extremely happy that we bring a lot of customers and therefore, there is this kind of price. Now this will not -- part of the bias will disappear, but part of the bias will be there. And when I talk -- when we talk about leisure hotel and when we talk about the Blue to come to the question you have, a bigger part of the benefits we bring and the benefits we have is that we have IT systems and structures in place, which actually allow hoteliers -- independent hoteliers to monetize their inventories better. And now the Marriotts and the Hiltons and whatnot, I mean, they have these systems, and they don't need our know-how. But the leisure hotel businesses usually are family businesses or small chains who don't have -- they do prices walking up and down the strip and see how other hotels have priced and then they -- sometimes they just have summer season and they have winter season prices, which is, of course, not very professional. And we see right now with our own TUI Blue hotels that the profitability we can generate by optimizing the yield equation, by optimizing the pricing is actually very good. And therefore, we have said our ambition is 30 -- we think this is a foreseeable future, let's say, 3 to 5 years. It really depends on how fast it will be. It took us -- was it 2 years, 2.5 years to do the first 100? I mean, with that, TUI Blue is now on -- in terms of awareness, brand awareness on the level like RIU, for example. It's not -- so it is nothing. And therefore, we believe it will be good. And we -- and as we have now also the investment vehicles, we can actually go with our own investment or with investing in different vehicles, different part of equity, if you like, which is real estate. We believe it's a good strategy. Sebastian, do you want to take on?

[Sebastian Ebel, executive]

Yes. I was just looking for a much word. I mean I have been through all the phases in the last 25 years, the relationship between TUI operator and the hoteliers. They have been good times and they had been bad times. Bad times when Thomas Cook collapsed, the question, is the TUI operators still the good model and so on, is the payment terms are they acceptable and so on. There was a lot of questions we faced. And I mean, one of the very few benefits of the crisis was that we could prove that we are a very reliable partner of bringing guests into our hotels so that the hoteliers could open. And that's why -- and I happy with David Burling, our Markets & Airline CEO, to 3 major events, especially Turkey and Spain. The relationship has never been better. I also know like the Greek hoteliers now having a boom, they will try quite significantly and increase the prices. Therefore, it's important to have a strong footprint and to make sure that there's full transparency because there is a very strong competition between the destinations. When I was in Turkey 6 weeks ago, they were really desperate because they just lost 50% of their business, the Russian and the Ukrainian part. And we said, yes, out of the 50 percent points, we can probably bring incremental 25 percent points. If the prices are good, then you have the devaluation of the lira which came from 12 to -- you look forward to 1 to 19. So this is a decrease of cost, which is higher than the inflation in the country. So -- then the Spanish hoteliers had to learn that they cannot raise the prices by 10%. So to have full transparency, but to deliver what we promise to be a really reliable partner and to help and to make sure that with our brands, with our partnership, they get up to 10% higher load factor, which means that they may lose EUR 5 per room night with us, but having the guests, the TUI guests, which is normally a very quality wise, it gets to buys by far more than other guests compensated. And I think we have now together educated ourselves that this benefit can be shown. That's why I'm pretty optimistic that we can limit the inflation to cost inflation and not to demand inflation. On the TUI Blue, I mean when we say we want to build 200, I sometimes would be more aggressive. It's a mixture of owned hotels, which we financed through the hotel fund, where we have now a quite interesting pipeline, Hotels, which we manage or franchise. If you look -- if the property is bought or built by the hotel fund, where we are having 10% share in it, these funds normally go to a return of 4% to 6%, sometimes with some time without the terminal value because for them, the terminal value is a big thing. For us, it was always difficult to say maybe we had to the terminal value when we sold the RIU hotels, but this is not something investors are so much interested in the terminal value. If it comes to management, I mean, if you look at the publications, the annual reports of our competitors, you will find numbers, 10% of the profit, 3% of the revenue goes to the management partner. I think this is a quite good normal standard. And maybe at some time, we get a royalty, which is slightly higher, maybe sometimes it's a strong competition, we will get less and franchise is 1% to 2%. At the end, it's important that the hotelier, the investor, and we are happy and that we get our incremental margin through selling it, therefore, things like app where we are a real fan of or the websites are so important because we have to -- we should accommodate not only our own capacity, but the incremental capacity of these partners.

[Friedrich Joussen, executive]

On the right side, has been waiting long and very patient.

[Cristian Nedelcu, analyst]

Cristian Nedelcu from UBS. Your second half EBIT in 2019 was around EUR 1.2 billion. Can you tell us what average selling pricing in for the summer to get there? You need 15%, 20%? Or can you give us a bit of color because it seems within reach. So secondly, on working capital, it sounded that a few quarters ago, you showed us a charts in the presentation saying there's still EUR 1.5 billion to EUR 2 billion of cash inflows from working capital as demand normalizes. It seems that's pretty much done if I look at the movement in the last quarter. But I guess you have this average selling price which is higher. So could you give us a feel how do you see working capital cash inflows over Q3 and Q4 this year? And the last one, you said earlier, you're thinking potentially soon to further reduce the KfW RCF. Can you give us a bit more granularity there? And do you believe you can do it from your own current liquidity? So I don't know, could you give us a reference point what sort of liquidity -- minimum liquidity you would look for at September year-end. I'm trying to understand, do you need to sell more assets or you need to take any other actions in order to paydown or to reduce this KfW RCF?

[Friedrich Joussen, executive]

I mean, first of all, we have done a lot of restructuring of our balance sheet. And I think that was largely liquidity related. And no, we have an operational business, which is very good. And now we are looking more balance sheet. I mean -- and there it's more the question of how much equity -- if we needed equity, how much equity would we need and so on. But for the reduction of the facilities, we have enough liquidity. Of course, we have EUR 3.8 billion it's a lot. Actually, it's too much right now or it's good that it's so much. Now on the working capital, one thing is very clear. I mean if you have 20% higher prices, so revenues were up 20%. If the revenues go up 20%, then the prepayments go up 20% and the prepayments and total payments were up 20%. That is actually direct proportionate of the envelope to the envelope of prepayments. I'm not sure if you want to talk about numbers. Actually, I'm pretty sure when I look at Sebastian -- I don't want to talk about numbers. So -- and the same is true for profitability. I mean, the same is true for profitability. I mean, we have, on purpose, not giving the guidance because it will be a good year. I'm pretty sure, but the uncertainties on the cost, particularly when you look at fuel and when you look at the dollar, but particularly fuel and dollar not so much. But I mean, that's so huge that the guidance would be, how do you say, more disturbing and distorting pictures. But one thing is clear we have -- we will be -- we will -- revenue-wise, I mean, it's already mathematically not possible to -- I would say, to I'm not sure pre-crisis levels. And we have now covered as I -- when you heard what I said, we have covered with the prices, all fuel increases, which we see right now. So therefore, there is good potential that the profitability, particularly in Q4 will be valued.

[Sebastian Ebel, executive]

I mean, it's an extraordinary market situation because I can only remember 1 year when we had such a strong short-term buying with good margins. Normally, it's that the margins short-term are not as good as the early booking. And that's what is very different years before -- or two centuries, not centuries, but for the last 20 years, I've been in the business. And the second, the food price and the cost of the -- so the range between a very good summer -- the numbers you mentioned were right and a moderate summer is huge. And therefore, we said we need some more knowledge. You were talking about -- asking about working capital and minimum liquidity. For the time being, we want to have more liquidity on hand as we normally had. I mean, you could say we are overcautious. Maybe we are. But in today's time, it's better to be overcautious than to be not so cautious. And maybe in a year on 2 years, we are back to liquidity lines, which we had before where we feel safer. On the other hand, to have these lines available doesn't cost a lot. We are talking about 1%, 1.5%. So very different to the cost we would have if we would draw. So it's a kind of insurance premium we pay at the moment, and we happily pay because it's worth doing it. And therefore, we want to have more liquidity. As you rightly said, on the working capital, there is also mathematically some good reason why this is not the end of the short-term -- it's also quite -- this is not something which then fades away again.

[Friedrich Joussen, executive]

And I think one of the things which has been discussed at least we do know the business with much less prepayments. I mean that is also something which...

[Sebastian Ebel, executive]

Hotel prepayments.

[Friedrich Joussen, executive]

Hotel prepayments, right? When you look at the hotel prepayments, we have actually taken out enormous amount of prepayments for the volume we generate EUR 500 million. I didn't know that we were talking about this, but it is significant. And the hoteliers have found also for the time being, other means of financing. And therefore, we have all the volume in with less prepayment, which is in terms of working capital.

[Sebastian Ebel, executive]

On the critical dates. On the critical date. When summer when we have more liquidity, we can be more generous. So bring intelligence into the system.

[Friedrich Joussen, executive]

Yes. For the liquidity low point is important, yes. Okay. Yes, please.

[Mark Irvine-Fortescue, analyst]

Sorry, 2 hopefully quick ones, please. It's Mark Irvine-Fortescue from Stifel. One on market share, one on hedging. The Page 10 slide on web traffic was interesting, quite a striking sort of share gap between you and your comps. Can you just confirm, is that just your Markets & Airlines business? Or is it the whole TUI Group? Because most of those comps don't have Cruises or Hotels?

[Sebastian Ebel, executive]

Markets & Airlines business.

[Mark Irvine-Fortescue, analyst]

And you talked a bit about -- the second question around hedging. You talked a lot about fuel price and the sensitivity to guidance. Can you just give us a couple of numbers with hedging, please? How hedged are you? What's the blended average rate?

[Sebastian Ebel, executive]

We have the policy that we hedge early and that we at least hedge what has been booked. This we couldn't follow, not because we were stupid because we haven't had the hedging lines with the bank. That actually now has changed with the good numbers we could provide so that we can follow the policy in future. On the currency, which is more important than the fuel, we are well hedged 2/3. And where we are not hedged, for example, some of the Turkish lira, we did it by purpose because you could see the devaluation and this is something which worked well. So the risk on the currency is not really there. Unfortunately, we are only able to hedge very light -- the fuel, so that we, at the moment, have hedged 35% to 40% on summer. And we have calculated today's fuel price in our calculation, and it seems to be that the customer is making this -- at least making this up. And what you also have to have in mind, we also didn't buy -- we were not able to buy options, which other does, which are normally not part of the numbers they give, but these options are in cost and today, it doesn't make sense to buy options because for what reason ever, the premium is 150 -- I mean, in the past, it was 20 30 with a couple of years at 150. So we are -- we now close the gap every week, but unfortunately, on a level which is not the same. I mean it's a difference between 10.50 per metric ton to 1,100 compared to maybe 750, 800, luckily only on the portion. And luckily, we could put that on to the prices. And interestingly, look forwards of the fuel is significantly lower. So that's why we hedge more the outturn month because that saves $150.

[Friedrich Joussen, executive]

I mean that's also an indication of what the market assumes the fuel price will develop to, right? I mean, therefore, I think, first of all, I think it will be moderate. And secondly, I mean, let's see, I mean, this is a little bit of history. Now we can hedge again. So since -- quite some time, but there was times where we had -- I mean, with our position, I mean, there was -- I mean, nobody would have given us hedging line just a couple of months ago.

[Sebastian Ebel, executive]

I mean, as a CFO, this is one of the things you never like. But you know what you should do, but we couldn't. But luckily now with the -- and the fuel -- the banks who hedge fuel are by far less than the ones who were hedge foreign exchange. That's why it was so difficult. But we have overcome that now.

[Friedrich Joussen, executive]

So now is the time where actually people from -- is it right okay, from the people -- from the web if there are people. No questions?

[Operator]

We currently have no questions via the telephone lines. [Operator Instructions] We currently have no questions from the telephone lines. I'll hand back over to your host.

[Friedrich Joussen, executive]

Okay. Thank you very much, operator. Thank you very much for all of you being here. We're very happy to come despite the fact that our hotels actually goes to fortune. But it is -- I have to say it's good when the hotels are priced high -- our hotels are priced high and good prices are a good basis for profitability. So we are happy to pay and we were happy to come here. And yes, Sebastian -- this is interesting. Sebastian said -- when Nicola said this is a price for the hotel you said it's too expensive, you go back and negotiate, actually came back and the price has increased by GBP 100. So that said, we were happy to be here. We are happy now that the business is actually kicking off. I see [ Christoph ] there. He was actually on site when we were actually -- was at 6th of March or whatever, 20. Interesting times, it seems to be that the crisis is now coming to an end. The booking numbers look good. The results look increasingly good. And I think that we'll get there. And thank you very much for coming today and also for keeping the trust in our company.

[Sebastian Ebel, executive]

We're really grateful for that.

[Friedrich Joussen, executive]

Okay. Thanks. Thanks so much.