Trade faces ‘storm’ of financial woe Ian Taylor


Agents and operators face “a perfect storm” of financial pressures, with insolvencies forecast when the government withdraws current aid measures, industry advisors have warned. Merchant acquirers’ demands


for processing card payments are exacerbating the cash pressures of refunds and chargebacks as some customers lose patience with repeated cancellations. Steve Robinson, global sales and


relationships director at financial services firm Coe Solutions, told an Elman Wall Covid-19 webinar: “The headline acquirers we’re having trouble with are getting worse. First Data has made very clear it wants


trust [arrangements] or 100% security. They want a cash deposit and [say] the talking is over. That isn’t workable. There are other acquirers doing the same.” He noted “there are banks that


still want to help” but said businesses facing difficulties with merchant acquirers “need to move away as soon as possible”. Abta head of member services


Danny Waine said: “It’s not widespread. It depends who your merchant acquirer is. First Data is being the most difficult. Different companies are more amenable. Get in touch with Abta if you have these issues. We’ve been able to help members move to new merchant facilities.” Themis Advisory director Jo


Kolatsis agreed, saying: “You have a


Inbound testing and lockdown hit buyer confidence


Samantha Mayling


Lockdown and testing announcements have hit customer confidence but bookings are still being made for summer 2021 onwards, say agents and operators. The Advantage Travel Partnership


saw sales in the week commencing January 4 at a “similar rate” to the previous seven days, with the Canary Islands, New York and Greece popular. Leisure director Kelly Cookes


said bookings data “may indicate a trend towards familiar destinations” and noted that 40% were for


4 14 JANUARY 2021


departures between September and December 2021 but “only 17%” were for departures before the end of May and 16% for June to August. “When the inbound testing


announcement was made, there was a noticeable drop in conversions,” she said. “Customers are still enquiring but are nervous about committing.” Barrhead Travel president


Jacqueline Dobson said “customer confidence took a dip” last week, noting “very little demand” for before summer 2021. She predicted “pent-up demand will be released” when restrictions ease, with sales for


As government


support starts to unwind, firms will be in difficulty – we expect insolvencies to increase


perfect storm. The latest lockdown put a damper on everything and people have begun to question what will happen at Easter and in the summer. We’ve seen people amenable to moving dates, but some have changed maybe four or five times now. People are losing patience.” She suggested “customers are


becoming more aggressive” with chargebacks and warned: “The refund credit note [RCN] validity


date will come to an end and people will need to find cash.” Insolvency practitioner Mark


Supperstone, managing partner at Resolve Group, said: “It’s a question of how long things can continue to be put back. Debt is mounting. We expect insolvencies to increase. As government support starts to unwind, companies will be in difficulty.” Abta head of financial services John


de Vial warned Atol and Abta-bonding renewals could be tough following a “painful” September renewals process. He said: “March will be no easier because people will continue to issue RCNs and the CAA is becoming more and more concerned about some licence holders as it becomes


clear early summer could be affected.” i RCNs extension call, page 39


Sandra Corkin


Travel


Weekly’s Lucy


Huxley


Paul Cleary


Alan Cross


later in the year “performing better”. Oasis Travel managing director


Sandra Corkin told a Travel Weekly webcast there was “a real nervousness” amid the third lockdown and dropped her January sales target from 60% to 30% of “normal levels”. Caribtours managing director


Paul Cleary reported “an incredibly good December” but January sales “nowhere near” the target of 55%- 60% of normal despite £500,000 of sales in three days last week. “I don’t think we can write off


peaks yet,” he said, adding that “there is every opportunity” of an


“elongated peak season” later this month and into February as the vaccine rollout gathers pace. Comparison site Icelolly.com said


July, August and June 2021 were its three most-searched departure months. Alan Cross, Jet2holidays’ head


of trade sales, told the webcast: “Customers’ confidence has been hit hard, but there’s a lot of pent-up demand. There’s never been a better time to be a travel agent, as customers want that reassurance.” Saga Holidays chief executive


Chris Simmonds said over-50s were “hungry to travel”.


travelweekly.co.uk


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