The owner of a 30-year-old ski specialist tour operator has laid responsibility for the business going into administration solely at the door of the UK government, which he accused of a lack of responsibility in its handling of the outbound travel industry during the Covid-19 crisis.
Harris Holidays managing director Dan Fox, a 30-year veteran of the ski industry, had been running the business – which traded as Ski Weekends – for 14 years, having gradually built his ownership to 100% during that time.
The company employed up to 18 people in the UK during its peak winter season, as well as a further 30 UK staff overseas in resort. It operated in 40 resorts across eight countries as the UK’s largest short-break ski operator.
It carried about 6,000 passengers a year, with an Atol licence for 5,000 package holidays. Ski Weekends sold about a third of its business through agents, predominantly about 20 ski specialists.
The business also owned the brands Mountainweekends.com, SkiWeeks.co.uk and snow-academy.com, although Fox explained these had been dormant for a number of years before the company ceased trading last week.
Fox said the government’s furlough scheme had been a ‘great step’ but did not go far enough, and should be ‘underpinned’ with further support to help more travel companies survive.
“We let most staff go in March before the furlough scheme reared its head,” he said. “We had to take some drastic decisions. The furlough scheme in itself is a positive measure, but it has to be underpinned by support to help businesses get out of the other end. It’s short term. Many travel businesses just don’t have the work for people, or the sales, to justify returning people to work – which is the reason why you see all the big tour operators making redundancies. Furlough is a good concept but it would need to run a lot longer to protect jobs in the travel industry. The £1,000 to retain staff up to January is meaningless and companies who have not had to shed staff will do best out of it, it’s a crazy waste of money and would be better given to NHS works as a bonus.”
He said the government fundamentally failed on its message to consumers over refund credit notes, which it finally confirmed had financial protection last month – leaving travel firms such as Ski Weekends unable to reassure customers their money was safe.
“Ask any travel business and you will hear this point,” said Fox. “Other countries’ governments acted very quickly to confirm the validity of refund credit notes, but the Civil Aviation Authority didn’t, or at least they were unable to say so without government approval. From a consumer’s point of view, the majority of people would’ve accepted them – except for those who were in financial difficulty, most people still want a holiday.”
He said Ski Weekends’ acceptance rate was “about 50:50”, but believes that “more than 90%” would have taken RCNs “if protection had have been confirmed” and the payment deadline extended from 14 days, as it was in other European countries.
“How is it in favour of the consumer if businesses end up in administration?,” Fox asked. “The CAA will reclaim what they can [from Harris Holidays and credit card companies] but the rest of it will come from tax payer money.”
Ski Weekends had not repaid any of its refunds, Fox confirmed. He said: “The reason is simple. Because of the way the market went, we were not able to reclaim more than 70% of the monies we paid out. Chalet owners are paid in advance and, hoteliers have 18 months to repay us in France. We lost 25% of our trading year, meaning we make an enormous loss.
“Many customers have been incredibly supportive. We hear from other customers who say that we have their money. We don’t. We have to spend it to deliver their holiday. This year, we have made a huge loss. Yes, there was money in the bank, and some customers will say they should’ve got their money back, but where do we begin? It’s illegal to favour individual creditors, which of course customers are. Do we pay back the person who shouts first, or loudest? We couldn’t refund everybody.
“Our sales team are passionate ski experts, they’re not experts at dealing with people who are calling up understandably frustrated, upset or worried about refunds. If the government had have come out on day one and said RCNs were protected, the majority of the public would’ve accepted them. In reality, the government’s indecision, or attempt to keep the consumer happy, has left us at loggerheads [with customers].
“This is further frustrated by the vast majority of travel insurance companies refusing to pay out on policies the public have paid for in good faith; their answer is to push back to the tour operator under the Package Travel Regulations. If the government had amended the 14 days rule, this could have been avoided.”
Speaking of the personal impact of the situation, he said: “My wife and I are heart-broken, the business is our baby. The personal financial impact is horrible. We’re not wealthy people, running a large company, where we have been taking profits for years. We had a lot of loyal customers – some of them even said they didn’t want their money back if it’d help us survive. Inevitably, we had some customers who were unhappy, and some who were frankly unreasonable. We all know they have a right to a refund. It’s not about not looking after customers, it’s about practicalities. We did what we thought was best.”
Fox revealed the company went under with more than 60 credit card chargebacks to be resolved, but blamed “disgraceful” insurance companies for fuelling the number of claims.
“They won’t consider a claim until customers have gone through their credit cards,” he said. “We understand that, from a customer’s point of view, they’re just trying to get their money back – but we end up in a hiatus because people don’t realise they would eventually get their money though us. This is a really complicated issue, so I get that it’s difficult for customers to understand – but the CMA [Competition and Markets Authority] hasn’t helped because it’s basically said that tour operators have to pay out but airlines don’t have to. It’s disgraceful.”
Fox explained: “Credit card companies charge back to us, insurance companies won’t pay out, many suppliers have not been compelled to refund, so tour operators are being hit from every side. There will be many more failures without decisive government action.”
Fox said he had “tried everything” to keep the business trading, including loans and endeavouring to sell the business.
“We were fully prepared to sell and give up 14 years of hard work to get out of a hole and protect our staff and customers, but people looked at it and said the amount of debt because of Covid was too high in a risky market,” he said. “We were also willing to take on £500K of debt to find a solution and allow it to continue.”
But Fox explained that the firm’s application for a Coronavirus Business Interruption Loan Scheme failed despite the effect being to reduce monthly repayments from a previous loan under the new deal.
“We were paying back £12K a month on a previous loan we took out to make a big tech investment,” he said. “There were no issues with that. The new arrangement would involve clearing that and paying back £8K a month – less than before, over a longer period – after a 12-month payments holiday. But the lender was told by the government that it has to apply the same conditions as normal trading times, so they decided we couldn’t afford it. But that’s lunacy, it’s obviously not normal times. I’m distraught, its heart-breaking.
“We tried everything to save the business, this is not about us trying to get away – it’s indicative of how the travel industry has been screwed by the government. Our lives, and 18 other people’s lives, have been seriously affected – because the government wouldn’t lend us money. We weren’t asking for handouts, we wanted to borrow the money to survive. The government failed to act in a way that was appropriate or responsible – or in line with other European governments. They could’ve acted swiftly to help companies across the industry. The package travel regulations are an EU directive and the EU advised members to change them to help the industry with the Covid situation.
“It’s probably going to cost the government more for us to go bust than it would’ve to loan us the money.”
And he warned that “many more” companies were going to fail without further government action, regardless of if they are granted loans.
Regarding bond renewals due next month, he explained: “If you have a loan in place, it reduces your liquidity. The government needs to provide meaningful underwriting of business, otherwise there are going to be dozens of failures – and they won’t all be SMEs like us. A lot of smaller companies have already gone, under the radar.”
Fox said Ski Weekends was on track to record its most profitable year in three years, after overcoming a downturn in demand because of uncertainty surrounding Brexit – and defended the action the business took in response to the Covid crisis that brought it down.
“We have put the business in the best possible financial position in terms of going into administration,” he said.
“We are truly sorry the guests who were affected have not had the service we would normally give, nor have we been able to solve their problems as we would have wished. Communication has been incredibly difficult with two of us trying to deal with 850 guests.
“Our staff are part of our family and we know many of our guests by their first names, we love what we do and are proud we have taken tens of thousands of guests out on trips, and hope to rebuild Ski Weekends in the future.”
“The only reason we have failed is Covid-19, but the failure could have been prevented by the government taking quick, simple and cost-free action. It’s either deliberate abandonment of our industry or disgraceful disinterest.”