Meanwhile, management at HostelWorld announced a financial hit of around US$5.4m due to the unprecedented challenges of COVID-19 in its most recent trading statement. This action, alongside the suspension of dividends and an existing credit of US$1.9bn, puts the company in a stronger position to withstand the impact of COVID-19.” TUI recently secured a US$2bn bridging loan, offered by the German development bank KfW. Johanna Bonhill-Smith, Travel & Tourism Analyst at GlobalData, comments: “Periods of financial difficulty and unforeseen expenses are factors that cause a company to suspend dividend payments. This is happening industry wide, with major players across hotels, airlines and technology providers following suit, says GlobalData, a leading data and analytics company. Both TUI, the European travel giant,and HostelWorld, a hostel-focused online booking platform, are some of the latest travel intermediaries to suspend dividend payments. As banks worldwide cancel dividend payments, more travel-related companies are following suit to keep cash flow circulating in a bid for survival.
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