Travel to the Gulf and via its airports “will come back” but will remain “extraordinarily soft” for the rest of this year even if the war in the Middle East ends quickly.
That is according to Travcorp Holdings group chief executive Andy Freeth, who told the Barclays Travel Forum: “The Gulf will come back, absolutely. The question is when. We need airlines to fly and then we can try to restore consumer confidence.”
He argued: “Price overcomes fear. People will go, the question is when and what will the price point be? We expect [demand for] the rest of this year to be extraordinarily soft.”
Freeth said the war had hit consumer confidence and added: “If the crisis goes on much longer, we’ll need to take action.”
He noted: “We had thousands of customers [in the Gulf] on February 28 and the airlines all had different policies. Other people were due to go, others panicking about whether to go in six months – all wanting answers. Giving customers the confidence you know what you’re doing is difficult.”
Freeth said Travcorp followed four principles: “Protect your customers and get them back. Protect your team, who are getting calls from customers wanting their money. Protect your reputation. And protect your cash.”
He argued: “We’re not going to make much profit this year, but we want to be here. If we give everyone their cash back, we won’t have a business because the money is with airlines and hotels.”
Freeth suggested: “It would be helpful if what airlines do was consistent. But airline policies were all different. It’s terrible for our reputation and the reputation of the industry. We tried to communicate effectively, but we would communicate something at 10pm and two minutes later it changed.”
He added: “We want to give consumers their money back. But when there are wholesale cancellations, the impact is massive.
“Refunding within 14 days is ridiculous. Some customers will put in a chargeback before they phone you.”
Industry lawyer Farina Azam, partner at Fox Williams, agreed: “Fourteen days is a really short period.”
She noted the problem is that “an airline may cancel because it can’t fly, but the hotel won’t because the room is there” and suggested: “You need strong contractual terms in place.”
