Customer refunds and card chargebacks dominate queries to industry advice portal Rebound Consulting, according to founders Steve Endacott, Seamus Conlon and Will Waggott.
The three industry executives launched the Rebound consultancy to offer free travel business advice at the end of March.
They highlight refunds as the issue most troubling tour operators and retailers seeking advice, with operators struggling to recover deposits paid to hotels or event organisers and forced to defer bookings or issue credit notes.
Even retailers operating trust funds face difficulties, according to Endacott, noting: “A retailer may have cleared £1,200 for a holiday into their trust fund, but paid out £500 for a low-cost flight, with the airline now offering a date change or credit note.
“If the customer wants a refund and recharges their credit card, the retailer not only loses their commission, but also £500 of flight cost they don’t have.”
Endacott said: “Large OTAs like On the Beach may be able to recover their payments from the airlines via recharges on the virtual credit cards they use to book, but many retailers dynamically packaging don’t have this protection and are fully exposed.”
Conlon said: “In principle, customers should always be offered a full refund as an option if a service or product can’t be supplied.
“[But] none of the current rules envisaged a complete cessation of travel or airlines not refunding travel agents or tour operators. We all need to be practical about the timescales of refunds.”
However, Conlon added: “My preference is that companies secure overdrafts and loans to fund expenses rather than rely on customer monies which should have been refunded.
“That way you know you have cash available and don’t have to worry about disgruntled customers destroying the reputation you have built with Facebook posts.”
The Rebound Consulting trio also note that although companies are furloughing staff, many are hesitating to furlough directors or senior staff.
Waggott said: “Furloughing staff closest to you is the hardest decision to make, but often you need admin staff to rebook customers on a rolling basis and not expensive management not used to doing the day-to-day jobs.”
Endacott added: “Most business leaders have got the message about cutting costs to the bone.
“But being the head of a business is a lonely position and I’m been told several times it has helped people to get some reassurance from a third party that the decisions they are making are the right ones.”
He suggests many directors forget to apply the logic they adopt in business to their home life.
Endacott said: “The next nine months are going to be the hardest of our working lives, with most people on furlough or taking large pay cuts.
“However, many people I have spoken to seem to have forgotten about themselves or feel it to be a failure to defer mortgages etc. It’s not, it’s just sensible to take the pressure off at home while you’re going through hell at work.
He said: “I recommend seeking rent or mortgage holidays and suspending as many large outgoings as you can until you’re back to full earnings. You have the rest of your working life to pay these off.”
Endacott was co-founder of Holiday Taxis and a former chief operating officer of On Holiday Group. Waggott was both head of tour operating at Thomas Cook and chief financial officer at Tui. Conlon is a former managing director of Airtours Holidays and TV Travel Shop and non-executive director of Cruise.co.uk.