Rainbow Tours initially assumes a decrease in traffic in the summer season of ’21 by approx. 30%

Is Rainbow optimistic about 2021? What measures were taken to maintain profits?  More flexibility needed – an opportunity for LOT and other regular carriers?

In recent weeks, the third biggest tour operator in Poland Rainbow Tours has noticed an increase in customer interest in the travel offer for the summer season of 2021. It initially assumes that the decrease in traffic in the summer of next year will amount to approx. 30%. Compared to the 2019 level, Touroperator is counting on positive profitability thanks to cost reduction – Maciej Szczechura, the member of the management board, told PAP Biznes.

Administrative costs down to maintain profitability

“The priority for 2021 is to maintain the administrative cost base at a level that will allow it to achieve positive profitability even with a decline in sales volumes. Second, we want to be constantly on standby to meet demand when it occurs, and we expect a clear rebound. Will happen, because people are tired of staying at home, they want to leave. Thirdly, we are watching the flexibility of contracts, “Maciej Szczechura told PAP Biznes.

In the third quarter of 2020, sales fell to PLN 137.1 million from PLN 816.3 million a year earlier. The operating profit was PLN 2.4 million, and the net profit was PLN 0.7 million.

Rainbow Tours has recently observed an increase in customer interest in the Summer 2021 offer.

“For two weeks we have seen a clear return of consumer optimism, greater than we expected. These are still not the previous year’s pre-sale levels, but the reaction to our offer for the summer of 2021 positively surprised us. Customers believed that next summer would be more normal. The pre-sale volume maybe 40 percent lower year on year.  It is still better than the sales results recorded during this summer “- said the board member.

The program for the summer of 2021 will be flexible in terms of volume.

We do not know how many customers we will be able to send. We strongly focus on the flexibility of contracts with airlines and hotels. As far as destinations are concerned, we assume for the time being that we will be able to fly wherever we used to fly. Although it is not known yet how it will be. A lot of depends on lifting restrictions in individual countries “- said Maciej Szczechura.

We can also expect that Rainbow will seek more flexibility in cooperation with regular airlines. LOT Polish airline summer season program is one of the potential fields of cooperation. Other carriers are also trying to adopt, Greek Agean has recently announced regular connection to Crete from Poland. The market is also waiting for Corendon airlines to come back to Poland.

Long haul exotic destinations selling with a very short booking window

For winter Rainbow is offering Mexico, Cuba, Dominican Republic and Kenya. Seems that the range of destinations is well-chosen and it fits the current market demand trend. However Rainbow seems to be much more defensive comparing to another market leader Itaka. Itaka has announced deployment of A330 wide-body aircraft to serve Zanzibar, Cuba and Cancun starting from December.

The agency confirms that the sales of exotic destinations is done with very short booking window. Most probably its stopping Rainbow from more ambitious actions on that field.

In case of Rainbow we don’t see the positive effect of dynamic packeging sales too . Market recovery is experienced by Best Reisen and other smaller competitors. Especially in case of Gulf destinations which seems to be “lost opportunity”.for Rainbow. The sales of regular long-haul tickets are quite low in November in case of Rainbow too. While we can see some signs of recovery shown by competitors – especially for exotic destinations. In December we expect exotic destinations booming. Will Rainbow catch up with the trend?