Travel agents say it is ‘Groundhog Day’ for the trade as they face thousands of cancelled bookings and losses in card transaction fees amid fears of more lockdown restrictions.
After many enjoyed a strong November, December has been described as “utterly disastrous” as consumers believe there will be further government-imposed restrictions after Christmas.
Spear Travels chairman Peter Cookson said the industry was experiencing high numbers of cancellations as it had done at the height of the pandemic and was yet again “invisible to the government” while hospitality businesses were making the headlines.
He said many of his company’s clients were cancelling rather than rebooking, and “just wanting their money back”.
He said: “A great November (albeit some of it already cancelled) was followed by an utterly disastrous December, not surprisingly, and no doubt a two-week lockdown after Christmas, so January will be a damp squib. Who knows, now, what’s going to happen to the travel industry next year?”
Agents also bemoaned the merchant acquirer card transaction fees paid on bookings which were now being cancelled. The fees are not refunded to agents, who are also charged a small, additional administration fee to process the client refund.
Spear Travels has estimated it has lost £40,000 in card fees since Covid started. “It’s iniquitous,” said Cookson.
Deben Travel owner Lee Hunt said the commission paid on a booking would normally cover the cost of card transaction fees, but agents lose out when sales are cancelled. A cancelled booking for £8,300 refunded to his clients has cost the agency £99.60 in lost card fees, he said as an example.
He said: “We are out of pocket through no fault of our own.”
Hunt added that more and more clients were cancelling either due to in-country restrictions, because they were testing positive for Covid as a result of the current spread of the Omicron variant, or because of general uncertainty.
“People are saying they will not book early, they will wait and see what happens,” he said. “We’ve had a huge amount of cancellations. It takes us back to the height of Covid and we are trying to pay back bounce-back loans, business rates, salaries, National Insurance and rent.”
While bookings for 2022 still looked positive, the problem was the lack of current cashflow, said Hunt, adding: “We are trying to be as positive as we can and sending Christmas cards to clients and gifts to our top clients but we need cash now to get through, which is why specific government grants are needed.”
Full Circle Travel managing director Niall Douglas said his agency had lost “more than £10,000, if not more than £20,000 or £30,000” in transaction fees since the pandemic started.
Douglas said: “I have raised this issue during the pandemic with my MP and with Abta – why don’t agents get this money back when they refund clients?”
He said there was a misperception among consumers that they had to pay the full holiday balance by card in order to be financially protected. “As long as some money is paid on the credit card, it doesn’t matter how the full balance is paid,” he added.
Advantage Travel Partnership said transaction charges continued to be an issue for agents. Leisure director Kelly Cookes said: “Throughout the pandemic we have been recommending that agents speak to their provider to see if they can re-negotiate.”
But she added that consumers were travelling if they could, particularly if it meant meeting families and friends they had been separated from. Last week 13% of bookings were to depart in December. “There is still a will to want to travel in a lot of cases,” she said.
Haslemere Travel managing director Gemma Antrobus, whose agency is unaffected by losses in card fees as it does not take card bookings for more than £2,000, was more confident about the market despite having to move France ski bookings due to new destination entry restrictions.
She said: “It’s hard to tell what will happen in January but even if the government does introduce restrictions here, I think people will be so naffed off they will really want to book to go away.
“Most of our clients who are booked to go to the Caribbean in January and February are pragmatic and they are not talking about cancelling.”