Hays Travel is to put suppliers that still owe it money for holidays cancelled as a result of Covid-19 on stop-sell from this week.
Managing director John Hays said such suppliers were making it hard for the agency to pay out refunds to its customers.
Speaking on a Travel Weekly webcast, he said he had made the decision “with a heavy heart” but that “patience was now wearing thin” as the situation had become “unsustainable”.
Hays said the company had been refunding some customers “out of its own pocket”, in cases where clients had genuine concerns about not getting their money back.
Hays Travel ranked at number two in the MoneySavingExpert league table of travel companies’ handling of holiday cancellations and refunds during the Covid-19 crisis.
John Hays said it was now time to “draw a line in terms of sympathy with our suppliers”, adding: “We’re really sympathetic to all of our staff in the firing line between clients and their refunds. And it’s not just our staff – it’s every agent around the country because, you’re getting abuse day-in, day-out because of refunds not happening and it’s not a nice place to be.
“We’ve always prided ourselves on looking after our staff and valuing the relationships with suppliers, but we have been refunding out of our own pocket. We started off in a strong position; Irene and I own the whole business, which has no debt and a really strong balance sheet, and we haven’t needed to draw dividends for the last decade or so. So that’s a nice, very strong position to start with.
“However, with regards support, we feel that we’re having to draw a line in terms of sympathy with our suppliers, many of whom we’ve had really good relationships with over many, many years. And so we’re starting to have conversations with suppliers which we’re really regretting and haven’t wanted to, but it’s more than six weeks now and every agent up and down the country is in the same position as we are. You kind of reach a point where we want to do the right thing by our customers and mostly to protect Hays Travel – and eventually your patience wears thin.”
Hays said there were sizeable amounts of money at stake. “There are very considerable sums of money from suppliers where we’re actually saying, ‘really we’re not willing or able to continue like this’. This is not enough and regrettably, and very, very reluctantly, we’re starting to have conversations saying, ‘we’re going to have to take you off sale’. It’s with a very heavy heart that we’re doing that; we know everybody’s in a tough place but this isn’t sustainable,” he said.
“Our relationships with our suppliers are confidential and but we are right on the cusp; if we’re not getting the right answer, in the next few days, I think we might start seeing us taking some suppliers off sale, but I’m not prepared to name them.
“In times like this, you learn who your friends are, who your good partners are and we’re doing really well for our good partners and, for obvious reasons, less well for our less good partners.
Asked if he expected the number of partners Hays works with shrinking after the crisis, Hays said: “We hope it isn’t permanent. We’re not trying to do anything, unilaterally, or too hard, but we’ve just reached the stage, eight weeks in, where we going, ‘enough’s enough’, but we’re doing it quietly and on a one-to-one basis. But obviously, that affects who we’re going to sell, going forward, for obvious reasons.”
Fellow director Irene Hays said: “Playing hardball, it’s not our style. Every time we speak with our suppliers, we always talk about the history of partnerships. We’ve been in business for 40 years now and that business has been built on a truly symbiotic relationship with suppliers. So it’s not in our nature or style.
“But it has been incredibly difficult for us and at times we have felt very much like piggy-in-the-middle; bearing the brunt of the customers’ challenge and the customers’ anxiety – genuine anxiety that they’re not going to get their money back. We have been as sympathetic as we possibly can be to the suppliers because we know our suppliers are in a similar position. We will come through this; we will, and it’s really important that those relationships stay strong.”
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