Europe’s largest holiday operator has resorted to frantic measures to persuade people to go on package holidays this summer: free Covid-19 travel insurance. Germany-based TUI said it was rolling out the policies across Europe this week after striking a deal with insurer AXA to pay for any coronavirus-linked medical plus repatriation cost. Even if it takes a loss on the insurance, the $2.6 billion company hopes it will reassure anxious customers and steal market share from rivals.
The idea of linking rent to revenue is a big change from lengthy leases that increase in line with inflation. The emergence of online shopping forced some to accept lower rents. Now, Covid-19 is hitting business in upmarket locations like London’s West End. Capco only collected 27% of the rent it was owed in the third quarter.
Linking rent to turnover leaves landlords with a more volatile income. It also incentivises tenants to sell more goods online, as internet sales are typically exempt from the turnover definitions used to determine rent. While punters eschew shops and restaurants, a shaky income stream may be the best landlords can hope for. It’s a bad moment to be a luxury goods firm, and a worse moment to be one without a leader.