Refund credit notes (RCNs) were a ‘mistake’ and a missed opportunity to change the way airlines refund the trade, according to the founder of Travel Counsellors.
Speaking at the virtual Institute of Travel and Tourism conference, David Speakman said “the industry has made the wrong decision” on RCNs, saying their widespread use is “one of the reasons people don’t want to book”.
Industry regulation experts have praised RCNs for helping travel businesses survive the unprecedented amount of cancellations and subsequent refund requests as a result of Covid-19. And the CAA is understood to be reviewing an extension of RCNs’ Atol protection amid fears of the impact of a renewed wave of refund claims.
But Speakman compared them to the lyrics of ‘Hotel California’ [you can check out any time you like, but you can never leave], saying: “It’s like saying, ‘We will take your money, but never give it you back’.”
He added: “The industry has apologised [for the delays to the refunds process] but it has to correct its ways. It should have originally tackled the government and said ‘make sure the airlines pass on the money down the pipeline’, and they never did that.
“If we had been on the right side of the argument, we would have a ready-made excuse to customers [that airlines are at fault for not refunding]. Refund credit notes took the pressure off airlines and put it on Atol holders and travel agents. It was a terrible strategic mistake.”
Speakman compared the tactic to a playground fight, saying intermediaries such as agents and operators were, “instead of fighting the bully” [the airline] had “whacked your customers instead”.
Leading online travel agents [OTAs] On the Beach and Loveholidays quit industry association Abta over the issue of package holiday refunds, that ultimately boiled down to airlines not refunding intermediaries.
Steve Endacott, chairman of Teletext Holidays said “we have to go for the airlines, not the OTAs [online travel agents]”, adding: “Ryanair are the worst”.
Lisa McAuley, managing director of B2B tour operations at dnata Travel UK, said the travel industry had “taken a beating” throughout the Covid-19 pandemic for its approach to refunds and was currently “in survival mode”.
Noting that consumer confidence in travel was “a huge issue” even before Covid, she said: “Segments of the industry haven’t covered themselves in glory” and “the industry on the whole has been tarnished”, which was “not fair” on the “number of companies which have behaved responsibly”.
And she noted that some operators have “have sucked up a lot of cost, and blame, for something that fundamentally hasn’t been our fault”.
McAuley predicted “well-capitalised businesses will survive and thrive at the end of all this” and said companies which put customers first will rebound stronger.
“We need to make sure that our businesses are making rapid, but not knee-jerk decisions,” she added. “You can’t over-communicate in a crisis.”
McAuley suggested the industry had to “do more collectively and individually” to help it regain consumer trust” which she said was “as low as it can go at the moment”.
Lucia Rowe, UK managing director of A-Rosa said that river cruise had shown that confidence can come back by successfully returning to operations. “We have shown people the world is still spinning,” she said
But Endacott warned of a “tough winter” and added: “Confidence may come back but it won’t be back in time for [peak booking period] January.”
He predicted a “very, very late booking market” for summer 2021 holidays, which could reduce capacity and thus shrink the market.
