Dnata has written to suppliers to inform them of an extension to its payment terms, meaning hoteliers may not be paid for up to 120 days after a client’s stay.
A letter from the company’s headquarters in Dubai advised hoteliers that “for a period of at least four months, [dnata] will be modifying [its] payment terms from 30 days post check out, to 120 days post check out”.
It continued: “Our operations have been severely impacted with reduced passenger traffic and mandatory flight cancellations as many countries have taken steps to try to prevent the virus from spreading. The travel industry is suffering and will continue to do so for an unknown period of time.
“With these drastic impacts affecting us across our entire network and throughout all our brands, we have no choice but to look at all possible actions to minimise the operational and financial impact on our business. This means we have to deploy our resources wisely and, as a long-term business partner of dnata Travel, we need your support.
“We must strive together to apply cost efficiencies, enhancements and improvements into our businesses in order to successfully navigate our way through the current turmoil. Unfortunately, we have had to take measures that go against our current policy, by restructuring out current dnata Travel payment obligations.”
The letter from the central ground services department states that all global dnata brands combined have had to deal with 200,000 cancelled bookings to-date.
More:Dnata Travel Group brands confirm start of refunds
On Thursday, dnata’s travel brands announced they had begun refunding customers for holidays cancelled due to current restrictions. A spokesman for dnata said there were no links between the payments due to suppliers and consumer refunds.
He also stressed that, despite the wording of the letter, the change to payment terms was short-term and would revert before August if circumstances allowed.
The spokesman said: “Our priority for the last month has been on supporting our customers and our people during an unprecedented period.
“However, like all travel businesses at this time, we’ve also needed to maintain a sharp focus on our cashflow against a backdrop of almost zero revenues.
“As a part of that cost management effort, we have taken the prudent step of starting conservations with our suppliers to discuss temporary alterations to payment terms. These changes are on a time-limited basis, to August 2020 at the latest, and would be subject to a reversal to our standard T&Cs earlier than that if circumstances permit. We look forward to working with them on arrangements that ensure both parties are able to navigate the coming period.
“We can confirm that monies to pay suppliers are not being used to refund customers.”
