Why are travel businesses offering credit vouchers instead of cash refunds?

Life__Goes__On

For package holidays the legal limit is 2 weeks
ATM the answer seems to be  how long is a piece of string

bagand96

In addition to the above, the timescale for flights is 7 days.

Westin

I thought it worth posting this link to an open letter that the CEO of one travel firm has written.  Perhaps helps to explain the issues behind the scene and thinking as to just why travel credit notes are being offered.
https://www.intrepidtravel.com/adventures/james-thornton-ceo-impact-coronavirus/

Pollycat

That put a lump in my throat, Westin.

epm-84

Westin said:

I thought it worth posting this link to an open letter that the CEO of one travel firm has written.  Perhaps helps to explain the issues behind the scene and thinking as to just why travel credit notes are being offered.
https://www.intrepidtravel.com/adventures/james-thornton-ceo-impact-coronavirus/

It's likely travel companies including Intrepid will have to increase their trip prices for 2021 bookings but they are unlikely to increase by more than 10%, as that will put off customers.  So worth noting if you accept a £1100 travel voucher for a £1000 booking then you might find you can rebook the same holiday during 2021 without paying any extra and maybe even have part of the travel credit left over for a 2022 booking  but if you take the refund you might have to pay more to rebook next year.  Of course if you need the £1000 because you're struggling financially now then you need to push for a refund.

Life__Goes__On

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Westin said:

I thought it worth posting this link to an open letter that the CEO of one travel firm has written.  Perhaps helps to explain the issues behind the scene and thinking as to just why travel credit notes are being offered.
https://www.intrepidtravel.com/adventures/james-thornton-ceo-impact-coronavirus/

There is no easy answer.
I would be worried the the voucher is just kicking the can down the road especially with the 110%
If they only make 4%  then it's a fairly bit hit and loss  with the vouchers.
 

epm-84

bobblebob said:

Can you not report agents that refuse to refund in cash to ABTA (those that are members)? Even ABTA are telling members to refund in cash

ABTA have asked the government for a change in the scheme due to exceptional circumstances whereby vouchers are issued as refunds and they are given ATOL protection (so if the company goes bust the customer gets their money back) and that if the voucher is not used after a certain number of months that it can be exchanged for cash, so that companies can stay afloat in the short term.

If you think about it that might work better for customers as well, as if holiday companies collapse (which can happen when people are actually on holiday or just about to leave) then it creates all kinds of problems as the state has to pick up the bill and people who were just about to go on holiday might have to wait a while for their ATOL refund and until they get it they may not be able to afford to book a replacement holiday.  That's the last thing we need once the COVID-19 situation starts to clear up!

I don't know where ABTA are with regards to getting what they requested but if they are still working on then companies will likely wait until the last possible day to give cash refunds.

epm-84

Life__Goes__On said:

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Westin said:

I thought it worth posting this link to an open letter that the CEO of one travel firm has written.  Perhaps helps to explain the issues behind the scene and thinking as to just why travel credit notes are being offered.
https://www.intrepidtravel.com/adventures/james-thornton-ceo-impact-coronavirus/

I would be worried the the voucher is just kicking the can down the road especially with the 110%
If they only make 4%  then it's a fairly bit hit and loss  with the vouchers.
 

Not necessarily if it's an average of 4% on the standard land only price based on 2 sharing.  What level of margin do they make on the extras and upgrades (which includes flights in Intrepid's case)?  Some holiday companies are known to make huge amounts of profit off single travellers who don't want to share a room!

Nebulous2

epm-84 said:

Westin said:

I thought it worth posting this link to an open letter that the CEO of one travel firm has written.  Perhaps helps to explain the issues behind the scene and thinking as to just why travel credit notes are being offered.
https://www.intrepidtravel.com/adventures/james-thornton-ceo-impact-coronavirus/

It's likely travel companies including Intrepid will have to increase their trip prices for 2021 bookings but they are unlikely to increase by more than 10%, as that will put off customers.  So worth noting if you accept a £1100 travel voucher for a £1000 booking then you might find you can rebook the same holiday during 2021 without paying any extra and maybe even have part of the travel credit left over for a 2022 booking  but if you take the refund you might have to pay more to rebook next year.  Of course if you need the £1000 because you're struggling financially now then you need to push for a refund.

There certainly isn’t widespread agreement with your assumption that prices will increase. A lot of people are predicting that it will take hefty incentives to get people back. China is discounting fares. My concern is that those deals won’t be open to people with vouchers. Here’s Ryanair predicting lower prices next year. 

https://www.thesun.co.uk/travel/11404285/ryanair-cheap-flights-after-coronavirus/

Life__Goes__On

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epm-84 said:

Not necessarily if it's an average of 4% on the standard land only price based on 2 sharing.  What level of margin do they make on the extras and upgrades (which includes flights in Intrepid's case)?  Some holiday companies are known to make huge amounts of profit off single travellers who don't want to share a room!

If that is the case with this article then I feel just stating the 4% would be disingenuous, as the total average percentage profit  on bookings including add-ons should be stated


I agree with you about the single supplement mark up.