Airlines, hotels and travel firms could solve their cash woes by introducing fully flexible booking

Linda J. Dodson

Last week I wrote about the “win-win” of reducing stamp duty rates, which would encourage more property sales and boost the Treasury’s depleted coffers despite the lower tax revenue per purchase. 

This week I bring you another mutually beneficial suggestion that might sound counter-intuitive from a corporate perspective but will ultimately be in the best financial interests of both parties. Travel companies should introduce fully flexible booking as standard. 

This will go down as one of the worst years for airlines in the history of aviation. Planes have been grounded for months, with operators forced to foot the bill for cancelled flights. In a desperate bid to stay afloat, many have resorted to breaking consumer law by offering vouchers instead of cash refunds for passengers unable to travel. 

The International Air Transport Association said this week it expected airlines to make a combined loss of £66bn this year – the largest ever – with further losses of £13bn next year. Visit Britain expects a 59pc decline in inbound tourism this year, which works out at a £20bn drop in revenue. 

Top of the priority list for airlines, and other travel firms including hotels, train operators, cruise lines and tourist attractions, will be to get cash back into their system so they can get up and running again and stave off the risk of bankruptcy. 

Even as lockdown lifts, consumer demand will not return to anywhere near its pre-coronavirus levels. IAG, British Airways’ parent company, said it did not expect air travel to recover fully until 2023, while Gatwick Airport said it could take four years.

Nevertheless, people are willing to start booking holidays. As restrictions start to ease, people are looking ahead to when they can go away. 

The problem is, with the Foreign & Commonwealth Office still advising against “all but essential travel”, the country’s most senior scientific advisers warning about the possibility of a second peak and travel insurers withdrawing many of their policies, there is still a huge amount of uncertainty. Should I book to go away for Christmas? What if, when it comes to it, there’s a valid reason I won’t be able to travel? 

This is why travel firms should let people book holidays with full flexibility. Consumers would give up their right to a refund in return for being able to move their bookings to another date at no extra cost. Travel firms would give up their awful practice of charging large sums for the smallest of changes in return for filling up their bookings and getting cash into their system. It’s true that some already offer this, but it is typically much more expensive and not standard across the industry. 

If I had my way, travel firms would keep this flexible policy in place even when coronavirus became a distant memory. This pandemic has brought with it many terrible things and there will be more damage to come, some irreparable. But wouldn’t it be wonderful if there were permanent good to come from it too?

What do you think? Let us know by commenting below

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