Holidaysplease marketing director Charles Duncombe says all agents would prefer customers to postpone rather than issue refunds, but they can only do this if the client has faith they will get their money back in the future.
It is bad enough when your revenue line turns to zero on account of not being able to sell anything. It’s a whole new ball game when your revenue line actually turns into a cost line as you are forced to refund customers through no fault of your own. It decimates your survival time.
At the moment refunds are the main thing threatening to send airlines and operators to the wall. Realising this, airlines are starting to resist their obligations to refund. As operators are not getting the refunds from airlines then they too are starting to resist refunds to customers. It’s like a game of pass the parcel with a live IED.
‘Unfair to consumers’
At the time of writing, Abta and the CAA are trying to persuade the government to relax the rules on customer refunds and allow airlines and operators to offer a credit instead. The sticking point seems to be how to make sure that these credits are backed by the government in a way that means they are as protected as an Atol booking, should the operator or airline go bust at a later date.
This is of course unfair to consumers who booked their holiday on the basis that they are entitled to a refund in cash if it doesn’t go ahead. These are consumers who need cash more than ever in these difficult times to pay their bills for the months ahead. Changing the goal posts will destroy consumer confidence in our financial protection system which we rely on so heavily to give customers faith in booking with us. I don’t know if consumer groups like Which? are involved in the negotiations but if not then it’s not much of a coincidence that the person being asked to pay for this is the one person not in the room.
There is also one major issue for agents that seems to be being overlooked. If the customer does not like the idea of a credit then they still have recourse to their credit card company. They can place a chargeback on account of a lack of service being provided. This chargeback would then land the refund IED in the lap of the travel agent.
This close to departure the travel agent is the one person in the supply chain who will not have the customer’s balance as it would have been paid to the operator weeks before. So the one person who will not have the money is the person who could be responsible for it. We have already started to see this with some of our customers, and who can blame them?
‘Government should provide guarantee’
It’s probably too much to ask the government to cover the costs of refunds because after all this money should be in the supply chain somewhere but the government could provide some form of guarantee to operators that if airlines and hoteliers are unable to pay back owed money to them then the government will step in. They could even lend operators the refund money in the meantime to help with cashflow. This would then give operators confidence to refund consumers and maintain confidence in the system.
I know as agents we would prefer customers to be postponing rather than getting a refund, and you can still persuade a customer to do this if they have faith that they will get their money back in the future. If you start taking away previously promised protections then they won’t trust us and getting any bookings becomes harder and harder.
Yes, we need to save this industry but that includes saving its most fundamental constituent, its integrity.