Kuoni boss Derek Jones says a refund scheme in Denmark could be a possible solution to the industry’s dilemma over refunds, credit notes and package travel regulations.
A UK government decision on whether to suspend the consumer refund rules of the Package Travel Regulations is not expected until next week.
Abta has been lobbying for a suspension of the legal requirement to refund consumers in full within 14 days of cancellation, requiring a temporary change to the PTRs.
Jones is the chief executive of Der Touristik UK – which includes Kuoni and other travel brands. Speaking to Travel Weekly editor-in-chief Lucy Huxley in a video interview, he said parent company Der Touristik has brands across Europe and solutions have been found by governments elsewhere.
“Denmark is a great example where they have agreed they will effectively fund the refunds for now and the tour operators can repay them back later,” he said.
“So effectively, in Denmark, they have used their equivalent to Atol – Atol is paying for the refunds out of their funding and tour operators can top Atol back up again once they are through the crisis.
“It solves the problem for everybody – customers are satisfied they have got their money back and tour operators are happy.
“There are solutions available. We just need to make the government understand.”
He said Kuoni has complied with the package travel regulations by refunding customers who want refunds but has encouraged re-bookings by offering credit of 110% of the value paid.
“I support Abta’s position,” said Jones, an Abta board member. “It is hugely difficult – the balance between customers who genuinely find themselves out of work and in need of the deposit on their holiday…but I understand the pressures on the travel industry from a cash perspective.
“Mark [Tanzer] and the team at Abta are doing a great job.”
Jones said Kuoni and its sister brands are also developing a post-coronavirus recovery strategy with ‘Project Restart’, looking at marketing and product ideas.
“[The travel industry] won’t start up again on day zero – coming out of the other side will be just as difficult as going in,” he said.
Revenues won’t start flowing immediately and consumer confidence will need to be restored, he added.
“There are two schools of thought…everyone in the world will be desperate for a holiday and will come flooding through the doors,” he said.
“The other argument is people will continue to be nervous about travelling for some time.”
He said the operator has taken a few bookings for honeymoons in 2021 and predicted people will want to mark special birthdays and anniversaries with holidays too.
Jones also outlined how Kuoni has coped with the escalating crisis over the past few months, since the first reports of coronavirus emerged from China.
He said their “radar was pinging” in January and the operator was “ahead of the curve”, as it established ‘Project Safeguard’ to protect its consumers, staff and the business.
The company had about 1,800 customers overseas when the Foreign Office changed its advice about travelling, and now just have 90.
Fifty will be home by the end of this weekend. There are 40 more in Australia and two are in South Africa.
A team of 20 has been working on the repatriation process, he added.
The head office in Dorking has been closed and staff are working from home.
The chain of 48 Kuoni shops has closed its doors, and a team of 40-50 agents are able to work from home to deal with customer queries.
The government’s Coronavirus Job Retention Scheme meant that the jobs of staff who had been made redundant could be saved.
About 70%-80% of staff across Kuoni and sister brands such as Carrier are now on the furlough scheme.
Jones said the role of leaders at such a time is “more important than ever” as staff take their cue from the top.
“If they [bosses] do not look like they’re in control, that leaks its way through the organisation,” he said.
“My team and I have been shocked by all this, like everybody else.
“You need to hold it together and lead the organisation…I think it’s important to be honest and it’s important allow yourself to have those moments and to show your frailties and show that it affects you and your family the same as it affects everybody else.
“Strength isn’t just bottling it all up and putting on a front; strength is being honest and acknowledging what the challenges are, and being part of the concerns that everyone has got.
“It’s easy to forget it’s a human issue, a human challenge – people are very sick and people are dying.
“It’s about staff and families…they need to be focused on the really important things in life being with families and making sure they are taking care of each other.”