European travel stocks soared on Tuesday morning as customers rushed to make new bookings after the U.K. announced its four-step plan to end coronavirus restrictions.
Shares of Tui, the German travel group, rose almost 7% in early European trading hours. International Airlines Group, the owner of British Airways and Iberia, also soared more than 6% and shares of the German airline Lufthansa jumped more than 4%.
The sector has been heavily hit by coronavirus’ restrictions, with people advised not to travel abroad and having to contend with strict quarantine policies if they do.
However, on Monday afternoon, U.K. Prime Minister Boris Johnson unveiled his four-step plan to lift all social restrictions by June 21 and that led to a surge in new bookings.
EasyJet said on Monday evening that it experienced a 337% increase in flight bookings in the U.K. and a 630% rise in holiday bookings following the government announcement. Tui also said bookings jumped 500% overnight.
Greece, Spain, Turkey and Portugal were among the top destinations in the new bookings.
Johan Lundgren, CEO of easyJet, said in a statement: “We have consistently seen that there is pent up demand for travel and this surge in bookings shows that this signal from the Government that it plans to reopen travel has been what UK consumers have been waiting for.”
Andrew Flintham, managing director of TUI UK and Ireland, said in an email that the announcement from the prime minister “was positive and shows that by working with the travel industry on a risk-based framework our customers will have the opportunity to travel abroad this summer.”
The U.K. is lifting coronavirus’ restrictions in four stages starting on March 8 with the reopening of schools, but the whole process will depend on how the epidemiological situation evolves.
The government also said it is reviewing international leisure travel restrictions and will announce the changes on April 12.
“We know that there are customers who want to travel, there is a huge desire to be out there and seeing the world and that pent up is going to come back, it is just a matter of time,” Keith Barr, CEO of IHG Hotels & Resorts told CNBC’s Squawk Box Europe on Tuesday.
“Am I gonna do the one-day trip from London to New York for a three-hour meeting? Probably not, so there will be some impact on business travel,” Barr said when asked how the sector is likely to change in the post-Covid world, but he added that the “but the vast majority of the estate is going to make it through this (crisis).”
