COVID-19 is an opportunity for travel to address the “immoral” use of customer cash that should have been dealt with before the crisis, investment banker Andrew Monk told the latest in Travel Weekly’s series of Webcasts.
Monk, chief executive of VSA capital, joined Travel Weekly editor-in-chief Lucy Huxley to discuss the coronavirus pandemic’s impact on financing and investment in the travel sector.
Monk, who has 30 years’ experience in the corporate financing world, said immediate prospects for the sector are not great, but longer-term the virus will go and there will be demand for travel.
But, asked about the controversy over firms being unable to pay refunds, he said it is “extraordinary that some travel companies are able to exist by using customers money to keep the business going”.
Monk said: “If you go into a shop, you hand your money over as you get the product, and that is the normal way of doing a transaction.
“It is very unusual, the travel industry, and I suspect that not everybody fully understands how it works.
“There’s lots of customers wanting refunds for holidays they have booked and not taken, but the money has been passed up the pipeline to the tour operator to the hotel or the cruise line.
“And I think there is a big job explaining that to consumers. This is one of the changes that probably should have been coming and what this will do is simply accelerate it.
“It is a concept that is really not acceptable and needed change. At the end of the day, if you pay your money for a product you should be given that product.
“For somebody else to use that money in the meantime is, if nothing else, morally wrong, but it’s an issue the industry has always had.
“I think it would be a good opportunity for the industry, perhaps, to sort that out. The industry needs to make itself much stronger.
“Demand is still going be there, people are still going to want to travel and go on holiday. That’s the good news. There is still going to be huge demand.”
Monk said all businesses must use the current crisis to reassess their approach and address issues they should have already dealt with so that they emerge stronger
“I’m looking at ways I can use this opportunity to strengthen my business. And I would say exactly the same to any who’s suffering.
“Okay, it’s not fun, but use it as an opportunity to see how you can make yourself stronger. It may be you do this by adapting your own business. Maybe you merge with somebody else. There’s all sorts of things you can think about.”