In an update released today, the travel agency group said it would be taking “decisive action” to combat reduced travel demand caused by COVID-19, “including increasing its domestic leisure offerings, promoting destinations still regarded as safe to travel to and cutting costs across the business”.
Like many travel businesses, Helloworld expects to take a big hit from coronavirus and says it’s impossible “to quantify the size of the impact on our earnings for the remainder of the financial year”.
But in some reassuring news for the group, it claims to be in a “strong position, with low debt levels, an extended debt maturity profile, significant cash reserves and undrawn facilities”.
HLO is also buoyed by domestic travel demand in the corporate travel market, which has “held up so far”, and a rise in demand for domestic leisure travel.
In cost cutting measures, Helloworld will put a freeze on chairman and non-executive directors fees for the remainder of FY20, cut the CEO and executive management team’s salaries by 30% and 25% respectively until 30 June, and put a halt to all non-essential recruitment.
In addition to this, staff are being asked to take paid or unpaid leave while all discretionary expenditures are being reduced or eliminated.
“Over the last two weeks we’ve seen a steady decline in bookings in some parts of our business, particularly cruise, inbound to Australia, wholesale to Asia and Europe and in corporate international travel,” HLO CEO Andrew Burnes said.
“At the same time we’ve seen cancellations increase in these areas and we anticipate lower demand to continue in to Q1 and possibly Q2 FY21 so we are taking action now to reduce our costs to sustainable levels based upon what we are seeing in the market in Australia and New Zealand at present.
“Helloworld is a strong business with a solid balance sheet, low debt levels and a mix of business, some of which are being impacted and some of which are not.
“Who knows how long this will go on but it will eventually get better and the world will recover and we want to ensure we are well positioned when that happens to meet the leisure and corporate travel demands of our customers in Australia, New Zealand and around the world.“
Travel agents across HLO’s Australian and NZ networks are currently contacting customers impacted by any potential changes to travel plans.
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