In a heartfelt article, Jess Dennison, head of trade relations at Latin Routes, outlines to travel agents the sheer scale of the coronavirus crisis on operators – and the importance of re-booking holidays
We appreciate that the situation with covid-19 is having a huge impact on everyone’s business at the moment and I empathise wholeheartedly with every single one of you facing so much uncertainty.
As one of the co-founders of Latin Routes and Polar Routes, I have recently seen a lot of negativity online surrounding the way tour operators are responding to cancellations and bookings which saddens me immensely.
So I would like to take the opportunity at this unprecedented time, to explain from a tour operator side, the impact of the current situation so that you have an understanding of how this will affect us if your clients opt for refunds over re-booking, in the hope that you will explain and encourage your loyal clients to re-book their trips with tour operators and indeed retain your own commission too.
Firstly, I would like to share with you that nine out of 10 of our direct clients have rebooked their trips within the next 12 months and chosen not to cancel so we are confident that most clients are reasonable and, if explained properly, most clients will opt to rebook and only cancel in extreme circumstances.
People will always want to travel and if they cancel there is no guarantee that they will book through you or us again so it is important that we encourage re-booking for all trips whether it be through Latin Routes or one of the larger operators.
What costs are we as a tour operator incurring?
• Clients travelling in Latin America now:
We are working all hours to repatriate all clients back from Latin America as many countries have now restricted flights to and from the continent.
This is our duty as a tour operator, but it isn’t free or cheap to do.
Unless they are rebooked on to the same airline, we incur the costs of these one-way, high-class tickets.
Often the airline that they have booked on is full and therefore it requires new tickets to be purchased on different airlines or even different cabin classes.
We often only have two to three days between the government announcing border closure and the borders closing so it means that availability is very poor and last minute.
We can claim a partial refund or credit against the leg that hasn’t been used but this amounts to often less than £100, when new tickets we are paying for are anything between £900 and £2,500 per person.
If we cannot get them home, we have to front the costs of hotels and expenses.
This has so far cost tour operators and us a huge amount of money along with lost services.
Most hotels are being flexible and offering rebook or refund, as are our transfer and tour suppliers but elements such as National Park fees, taxes and permits such as Machu Picchu are all non-refundable and we won’t be able to claim those back so they are a loss to the business.
• Cancellations of future holidays:
When a client cancels due to the fact that they can’t travel due to coronavirus and the FCO advises against travel there, the cost of this to us as a business isn’t just the loss of commission or business, these cancellations cost us a huge amount of money.
Here is why:
Most trips have a number of flights involved and with our trips about 30-40% of the cost is made up of international and domestic flights.
The current policies for airlines such as British Airways mean that clients can rebook their flights free of charge or can claim a voucher for future travel with no name changes permitted.
I must be clear that the airlines are not offering refunds. This relates to all airlines at the moment and domestic carriers too.
Please click here to see the policy of British Airways, our main flight carrier to Latin America.
So, if your client claims a full refund from us, we have to pay out on money we won’t receive back.
Hotels and services are generally being quite flexible, thankfully, but permits, local taxes and National park fees are all non-refundable.
We will obviously fight these but we are not hopeful.
So it isn’t just about the commission and time that went into booking these holidays that we lose, it is much more than that.
We stand to make a physical loss on each booking that cancels of a substantial amount.
This is the situation for many tour operators out there, big and small.
• Travel agent commission:
It is important to mention that we want you to earn the commission- as you can see from the above, it is impossible for us on a refund to pay out your commission, but you have also put so much time and effort into these bookings and by offering re-bookings we are able to honour your commission because although deferred, the client will still travel and we and you can earn the commission.
We want to support your businesses too and by rebooking this is where we can all support each other and get this industry going again.
• Impact on our suppliers and communities:
This also affects the local communities and suppliers in each Latin America country that we operate.
Latin Routes was started because Martin Johnson and I love the culture, the people and the beauty of the continent.
We have a true passion for it and by re-booking your clients we are able to continue to support tourism, which is one of their main industries and will impact so many as it does here.
Many of the communities and people in countries we operate in rely on the income from tourism.
The current situation has devastated many communities and we have pledged to bring back tourism to them as soon as we can.
The most effective way to do this is to send everyone away next year if they were due to travel this year – alongside all those who will be itching to travel once this nightmare is over!
Final message
Please encourage your clients to re-book their trips to Latin America and elsewhere around the world.
Please take the time to explain the impact this has on you as a travel agent and us as a tour operator and explain the airline policies to them and the losses we stand to lose as businesses.
Send them the links of the airline policies. Most people are reasonable!
If they still wish to cancel, ask them if they will contact their insurance companies to claim on lost services and flights.
Please do everything in your power to protect our amazing industry and the people in it, both near and far.
Thank you.