[Misc] Summer Holidays

[Rugrat]

I think he’s being pretty optimistic tbh

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No way are these places allowing mass tourism any time soon imo. Some sort of 'I'm safe passport' would allow travel to open up but that relies on countries/governments agreeing how to implement.

Of course tourism is a big economic driver for many countries but the impact of going through numerous lockdowns is going to be far more damaging than extending the current border closures and trying to get this right first time I'd have thought

 

[Balders]

Other countries may be opening up before us. For example, Austria are allowing hotels and restaurants to open from mid May.

Simon Calder obviously mentioned the FCO advice as having to change, as a prerequisite.

A much smaller travel industry than before, with lower capacity. Calder said quite deliberately so in 2020 and 2021, to restrict supply, so Europe’s tour operators and airline can raise prices and swell profit margins, to recoup their huge losses from this lockdown.

I'm on the front line so I have first hand experience of how this has played out over the last month, owning my own Travel Agent business. A lot of how this plays out for 2020 and 21 will be dependent on how long this lasts. Jet2 Holidays are in a strong position owning their own airline and already have prices out for the key periods up to Sept 21. Experience so far is that pricing is mixed - I've seen plenty where a similar holiday is broadly the same or cheaper in 2021, but also examples of quite hefty increases. The majority of airlines only release pricing 11 months in advance, so not really a lot to go on for next summer, but up until then, no really wacky increases (apart from the Business Class deals aren't what they used to be!)

The main issue now is Travel Companies surviving this - most Tour Ops are in the perilous position of having to pay full refunds (as per the Package Travel Regulations) yet they just don't have the money, because they've paid Airlines and Hotels and those are desperately hanging on to cash (Airlines have been described as one big ponzi scheme as they spend the cash before the customer travels, unlike the majority of Tour Ops/Agents who keep customer's cash in Trust) Where the cash is coming from in the next "x" months to get liquidity back into the market is anyone's guess - currently it will be 3 months of refunds (yet to be paid for most) or rebooks or holidays paid for on credit notes, so bugger all cash!

Travel has always been based on flexible pricing based on Supply/Demand - I suspect pricing will settle down once the market landscape has been established and people's propensity to book a holiday dependent on their personal circumstances and disposable incomes.

 

[Cowfold Seagull]

Agreed, as I'm sure I've posted elsewhere.

It will either be...

- Prove you are "Covid-19 safe" by way of some sort of Internationally-recognised certificate or passport.
- You can't come in / You can come in but you have to go into quarantine for 14/21/28 days.

As such I'm not sure travelling for leisure is going to be viable for many for some time.

Sad but true I'm afraid, my annual trip to Kefalonia next month has been cancelled, and rather than rebooking for this September, which would have been an option, I've decided to wait until next May instead.

 

[Weststander]

I'm on the front line so I have first hand experience of how this has played out over the last month, owning my own Travel Agent business. A lot of how this plays out for 2020 and 21 will be dependent on how long this lasts. Jet2 Holidays are in a strong position owning their own airline and already have prices out for the key periods up to Sept 21. Experience so far is that pricing is mixed - I've seen plenty where a similar holiday is broadly the same or cheaper in 2021, but also examples of quite hefty increases. The majority of airlines only release pricing 11 months in advance, so not really a lot to go on for next summer, but up until then, no really wacky increases (apart from the Business Class deals aren't what they used to be!)

The main issue now is Travel Companies surviving this - most Tour Ops are in the perilous position of having to pay full refunds (as per the Package Travel Regulations) yet they just don't have the money, because they've paid Airlines and Hotels and those are desperately hanging on to cash (Airlines have been described as one big ponzi scheme as they spend the cash before the customer travels, unlike the majority of Tour Ops/Agents who keep customer's cash in Trust) Where the cash is coming from in the next "x" months to get liquidity back into the market is anyone's guess - currently it will be 3 months of refunds (yet to be paid for most) or rebooks or holidays paid for on credit notes, so bugger all cash!

Travel has always been based on flexible pricing based on Supply/Demand - I suspect pricing will settle down once the market landscape has been established and people's propensity to book a holiday dependent on their personal circumstances and disposable incomes.

Thanks, very informative. I’ve audited ATOL tour operators accounts, where they have to report to the CAA quarterly and have comprehensive and not cheap bonding.

One genuine question -
where you say operators have paid overseas hotels upfront, every time a tour operator goes bust, Tunisian, Turkish and Spanish hoteliers appear in our media, claiming that they’re only normally paid when blocks of tourists arrive. What’s the norm for a package holiday?

 

[Balders]

Thanks, very informative. I’ve audited ATOL tour operators accounts, where they have to report to the CAA quarterly and have comprehensive and not cheap bonding.

One genuine question -
where you say operators have paid overseas hotels upfront, every time a tour operator goes bust, Tunisian, Turkish and Spanish hoteliers appear in our media, claiming that they’re only normally paid when blocks of tourists arrive. What’s the norm for a package holiday?

All depends on Tour Operators Contracts with Hotels - it's not unknown for some Operators to pay after travel, but then you have to add in non refundable rates (which Ops pay upfront) into the mix and in general the majority pay anywhere between 10-28 days before. The main issue for Tour Ops are the airlines - I guess most of the Trade operate on ITX fares with Scheduled Airlines and in general terms they are ticketed and paid 6-8 weeks before travel (hence we in the trade can take deposits on flights) but there will also be a fair few up front paid tickets and also all the bookings that are done with the Low Cost Carriers (Ryanair, Easyjet etc) that is all pay up front.

So in general terms, the better the rate, the quicker Ops pay Airlines/Hotels (save the ITX fares which are generally slightly cheaper) but the main problem is getting the cash back from Scheduled Airlines as opposed to the Low Cost Carriers.

 

[Beach Hut]

Thanks, very informative. I’ve audited ATOL tour operators accounts, where they have to report to the CAA quarterly and have comprehensive and not cheap bonding.

One genuine question -
where you say operators have paid overseas hotels upfront, every time a tour operator goes bust, Tunisian, Turkish and Spanish hoteliers appear in our media, claiming that they’re only normally paid when blocks of tourists arrive. What’s the norm for a package holiday?

We were caught up when an Internet travel company went bust around 6 months before the holiday. What we found out was was the flights were paid for with the deposit requested but the hotel was not, we re-booked direct the hotel and lost the transfer from the airport as it was all part of the package

 

[Weststander]

All depends on Tour Operators Contracts with Hotels - it's not unknown for some Operators to pay after travel, but then you have to add in non refundable rates (which Ops pay upfront) into the mix and in general the majority pay anywhere between 10-28 days before. The main issue for Tour Ops are the airlines - I guess most of the Trade operate on ITX fares with Scheduled Airlines and in general terms they are ticketed and paid 6-8 weeks before travel (hence we in the trade can take deposits on flights) but there will also be a fair few up front paid tickets and also all the bookings that are done with the Low Cost Carriers (Ryanair, Easyjet etc) that is all pay up front.

So in general terms, the better the rate, the quicker Ops pay Airlines/Hotels (save the ITX fares which are generally slightly cheaper) but the main problem is getting the cash back from Scheduled Airlines as opposed to the Low Cost Carriers.

Thanks again.

The most common situation I saw, was that an international payment was made to the hotel on the key guests arriving date.

As you say, not later.


Flight costs - the dichotomy was between blocks of Committee Seats booked on airlines eg T Cook, carrying great risk to the tour operator. Versus ad hoc seats booked as passengers booked.

 

[Balders]

We were caught up when an Internet travel company went bust around 6 months before the holiday. What we found out was was the flights were paid for with the deposit requested but the hotel was not, we re-booked direct the hotel and lost the transfer from the airport as it was all part of the package

Hi Beach Hut, forgive me but I remember this and back then the online travel agent booked yours as an ATOL "Flight Plus" as opposed to a Package (as did I and other agents, predominantly with Low Cost Airlines)

"Flight Plus" only offered basic financial protection as opposed to full "Package" rights. Flight Plus was outlawed when the revised Package Travel Regulations became law in 2018. Package Travel is creaking as it is in these times - Flight Plus, if still around now would be total carnage imho!

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[Weststander]

No way are these places allowing mass tourism any time soon imo. Some sort of 'I'm safe passport' would allow travel to open up but that relies on countries/governments agreeing how to implement.

Of course tourism is a big economic driver for many countries but the impact of going through numerous lockdowns is going to be far more damaging than extending the current border closures and trying to get this right first time I'd have thought

You’d know more about it than most of us, but I wonder what the Spanish, Greek and Turkish governments will do? Will they really write off an entire year’s tourism income, and leave millions (in total) unemployed? Purely a guess, it wouldn’t surprise me if they all opened up by June, beginning of July latest.

 

[Balders]

Thanks again.

The most common situation I saw, was that an international payment was made to the hotel on the key guests arriving date.

As you say, not later.


Flight costs - the dichotomy was between blocks of Committee Seats booked on airlines eg T Cook, carrying great risk to the tour operator. Versus ad hoc seats booked as passengers booked.

I think a lot of the Thomas Cook issues with Hotels were that they hadn't been paying them as per contract many weeks before their demise.

Buying up blocks of seats isn't that prevelant these days as the majority of those were with airlines like Monarch and Thomas Cook. Tui still do them, but mainly for very specific Tour Operators who specialise mainly on single destinations, Egypt as an example.

The only other way similar happens is Ski Tour Operators but they tend to charter the aircraft 100%, rather than buy blocks of seats.

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[Weststander]

I think a lot of the Thomas Cook issues with Hotels were that they hadn't been paying them as per contract many weeks before their demise.

Buying up blocks of seats isn't that prevelant these days as the majority of those were with airlines like Monarch and Thomas Cook. Tui still do them, but mainly for very specific Tour Operators who specialise mainly on single destinations, Egypt as an example.

The only other way similar happens is Ski Tour Operators but they tend to charter the aircraft 100%, rather than buy blocks of seats.

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The main small operators I worked on (in the last decade) took just 4,000 PAX a year, on niche holidays to places such as Egypt and the Caribbean. Nine months ahead, booking not insignificant blocks of seats on charter flights owned by large rivals.

 

[Papa Lazarou]

We've got a trip to Australia via Los Angeles booked for July / August, so that's very much up in the air. All the accommodation (3 places in LA and 1 in Australia) are free cancellation until July, I just need to check the flights, which are the majority of the cost. I did pay a little extra to get a ticket we could cancel and only lose about a grand, but I guess if we can't travel we'd get it all back (we have world wide travel insurance take out before the lockdown and paid by Credit Card).

I'll just have to see how it goes.

 

[Rugrat]

You’d know more about it than most of us, but I wonder what the Spanish, Greek and Turkish governments will do? Will they really write off an entire year’s tourism income, and leave millions (in total) unemployed? Purely a guess, it wouldn’t surprise me if they all opened up by June, beginning of July latest.

Nobody really knows, we're in uncharted waters. Macron said today that he could see Europe's borders shut till September and that might be optimistic.

If countries do open up to tourism then they will get a short term economic uptick but this thing will soon return and the short term benefit will soon be wiped out by something much more long term I suspect.

It's no more than a hunch but I think the winners will be those that are more patient and all but eradicate this thing before inviting the world back in, and only then with conditions attached. In this respect it looks to me that Oz and NZ are doing the right thing although their economies are less dependent on tourism than those you mentioned

 

[Weststander]

Nobody really knows, we're in uncharted waters. Macron said today that he could see Europe's borders shut till September and that might be optimistic.

If countries do open up to tourism then they will get a short term economic uptick but this thing will soon return and the short term benefit will soon be wiped out by something much more long term I suspect.

It's no more than a hunch but I think the winners will be those that are more patient and all but eradicate this thing before inviting the world back in, and only then with conditions attached. In this respect it looks to me that Oz and NZ are doing the right thing although their economies are less dependent on tourism than those you mentioned

Even within the EU, viewpoints and actions are widely divergent, much to the dismay of eurocrats who were meant to coordinate the response, but who’ve been trampled over by national interests.

Millions resume work in the Spanish manufacturing and construction sectors tomorrow. It was only on 1st April that their death tally was 950, even now daily numbers in the 500’s to 600’s. Their government’s aim, simply to kickstart the economy.

 

[Papa Lazarou]

Even within the EU, viewpoints and actions are widely divergent, much to the dismay of eurocrats who were meant to coordinate the response, but who’ve been trampled over by national interests.

Millions resume work in the Spanish manufacturing and construction sectors tomorrow. It was only on 1st April that their death tally was 950, even now daily numbers in the 500’s to 600’s. Their government’s aim, simply to kickstart the economy.

At any cost, it would seem.

 

[dstanman]

I expect the European governments will want to get the tourism industry up and running to boost the economy as soon as they can and will agree to hotels and resorts opening during the summer, however I expect this will be restricted to nationals within their own countries.

I cannot see foreign holiday travel being accepted until there is clear evidence that the virus is under control or some sort of passport / vaccine is available.

They will not care about the impacts to travel companies or the likes of TUI who have received a €1.8B loan from state-run KfW bank approved by the German government, and would not be surprised if TUI offer better deals within it parent company rather than its UK subsidiary who have furlough a large number of staff in the UK.

I do feel sorry for Hayes after buying the Thomas Cook shops to now be hit with this. I expect we will see the return of smaller specialist independent travel firms in 2021, who will be far more limited in what they offer and not have the discounts the likes of TUI can negotiate but we may get a reasonable service

 

[Drumstick]

It’s vital that people look to defer trips rather than refund. The smaller travel companies are not going survive otherwise.


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[nicko31]

It’s vital that people look to defer trips rather than refund. The smaller travel companies are not going survive otherwise.


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Indeed, if everyone insists on refunds vast areas of tourism will be wiped out

 

[The Wizard]

TUI are an absolute disgrace, don’t get me wrong this is all totally unprecedented and I’m sure travel companies are up shit creek but they haven’t yet paid out a single promised refund to anyone who had holidays booked after 16th March, despite promising them and claiming they are processed, we had a refund ‘processed’ on the 18th March and are still waiting, thousands of people on twitter and Facebook are still waiting from a week before that, not one person has received a refund and some are desperate for the money.

I will never book with them after this, having booked with them for all my life pretty much i would prefer to pay more and book with a more honest company, I can handle waiting for a refund don’t get me wrong I expected it to be a long time but they aren’t replying to anyone, not answering phone calls and sending copy/pasted replies to people who ask about refunds, very very poor from such a big company.

And in reference to the guy above saying about deferring trips, we did try but the prices for later in the year have been massively hiked, clearly on purpose. So we couldn’t afford the holiday we had booked before.

 

[Balders]

TUI are an absolute disgrace, don’t get me wrong this is all totally unprecedented and I’m sure travel companies are up shit creek but they haven’t yet paid out a single promised refund to anyone who had holidays booked after 16th March, despite promising them and claiming they are processed, we had a refund ‘processed’ on the 18th March and are still waiting, thousands of people on twitter and Facebook are still waiting from a week before that, not one person has received a refund and some are desperate for the money.

I will never book with them after this, having booked with them for all my life pretty much i would prefer to pay more and book with a more honest company, I can handle waiting for a refund don’t get me wrong I expected it to be a long time but they aren’t replying to anyone, not answering phone calls and sending copy/pasted replies to people who ask about refunds, very very poor from such a big company.

And in reference to the guy above saying about deferring trips, we did try but the prices for later in the year have been massively hiked, clearly on purpose. So we couldn’t afford the holiday we had booked before.

And those that booked in a Tui shop can do nothing as they've temporarily closed the shops, furloughed all the staff and told customers to wait until the shops open again before they can do anything.

The big problem here, not just for Tui, relates to the furlough scheme which is counter intuitive in the Travel Industry - there is more work to do now than at any other time, rebooks, cancellations, refunds, balance collections etc.. and most staff aren't now working!

Refunds will take ages, not only due to the sheer volume, but also due to the above...

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