The leading tour operator “Novaturas” has started 2022 with solid sales results. In the last month of the first quarter, the group for the first time since the beginning of the pandemic, have exceeded the results of the same month of 2019 in terms of number of travelers served and the revenues generated. However, globally rising aviation fuel prices have adjusted the company's profitability ratios.
During the first quarter of 2022, the company has generated EUR 29.2 million revenues. In three months, the group has served 36.4 thousand travelers. EBITDA was negative and amounted to EUR 96 thousand. Traditionally, the first quarter of the year is the low period in the tourism industry.
"We have started 2022 successfully and are continuing with gradual recovery that has already begun at the end of last year. In the first quarter of 2022, we have generated 4 times more revenues than in the first quarter of last year and have even exceeded the results of the corresponding period of the pre-pandemic 2019. If compared to the first quarter of last year, this year we have served 3 times more travelers’ group wide. The portfolio of winter holiday destinations has also returned to the usual pre-pandemic times. We are planning that the volumes of second quarter of this year will also be close to 2019”, says Vitalij Rakovski, head of “Novaturas” group.
New challenges: Russia's war against Ukraine and increasing aviation fuel prices
After the successful start of 2022, the group had to face new challenges: the breakout of Russia's war against Ukraine at the end of February and globally rising oil prices have affected the entire tourism sector.
The closure of the Ukrainian airspace for civilian flights has corrected the group's flights routes and durations. "The war has affected not only the routes of the flights, but also the behavior of travelers. During the first days of the war, the number of new bookings has temporarily dropped by almost half, people made new purchases for trips that were 2 to 3 weeks prior the departure. Since the end of March, the number of new bookings has gradually recovered, and now we are back to the usual numbers of new bookings just as it has been before the war. In March we have also actively cooperated with the embassies and consulates to help repatriate the Ukrainian citizens trapped abroad to the Baltic states”, says CEO of the group.
Russia's aggression against Ukraine has also directly affected tourism companies operating in the Baltics. With sanctions imposed on the tour operator “TUI Baltics”, the company has been forced to close its operations in the Baltics.
Another challenge the tourism sector had to face in the first quarter - drastically rising oil prices. Rising oil prices have led to significant increases in aviation fuel prices. This has been one of the main factors that have affected the group's profitability. The group has sold most of the first quarter trips already in 2021. This means that the cost of these purchased trips has increased significantly in 2022 due to the increasing fuel prices, and it has caused negative impact on the profitability indicators of the first quarter. Negative profitability was also influenced by the intense competitive environment in some of the winter holiday destinations.
“Novaturas” group financials for Q1 2022:
| Q1 2022 | Q1 2021 | Q1 2019 | |
| Revenue | 29 254 | 5 571 | 28 806 |
| Gross profit | 2 746 | 1 617 | 3 559 |
| EBITDA | -96 | 615 | 83 |
| Net profit (loss) | -505 | 191 | -148 |