Online Travel Agents are using technical loopholes to strip hoteliers, self-catering businesses and bed & breakfast providers of vital cash during the current crisis, claim tourist businesses on the Isle of Skye
Evidence gathered by Tourism Management Organisation, SkyeConnect, reveals that OTA’s are unilaterally refunding holidaymaker deposits regardless of the accommodation provider’s cancellation policy.
Accommodation providers are seeing cash disappear from the business as OTA’s use “Force Majeure” clauses to fully refund customer deposits, while allegedly retaining their own commission.
Many businesses who have invested money in improving the visitor experience ahead of the start of the season simply do not have the cash to offer these forced refunds.
Dave Till, the Chair of SkyeConnect, said: “We constantly hear the phrase ‘we are all in this together’, but that is certainly not the case where the Online Travel Agents are concerned. They are not operating in partnership with accommodation providers. They are profiteering at the expense of SME’s who were already facing a cash-flow crisis. I fully expect to start hearing of business failures any day now. It is a disgrace.”
In one case, a Skye-based self-catering operator had a lot of bookings for April and May on ‘non-refundable deposit’ terms. In good faith, the operator contacted each and every customer to offer credit notes to enable the booking to be honoured at a later date. The vast majority of customers – understanding the cashflow crisis facing the sector – agreed to accept credit notes and leave their deposits in place. But, without warning, Booking.com stepped in.
“…..and then this morning (25th March) I woke up and there were cancellations free of charge…and so, guests have agreed credit notes which meant we thought we had that funds (sic) to tide us through….... And then Booking.com sent out mass emails to everyone with a check-in date up to the 13th April and said you can now cancel free of charge…and of course Booking.com are still taking a fee.”
Another Skye Business offering Bed and Breakfast accommodation claims the behaviour of the OTA’s has had a devastating effect on the business and their family. “We just went from being financially stable to being on the breadline within a week. At the moment I have a small income but that doesn’t cover anywhere near our outgoings. So, we have got our mortgage holiday and we are putting all our food on to credit cards at the moment, but we only have a certain amount of credit. We reckon three months and then we are going to run out of credit avenues.”
SkyeConnect’s, Dave Till, is urging Government to step in and prevent further distress in the sector. “Small businesses are powerless against these global giants. It needs governments to bring the OTAs into line and prevent thousands of small family businesses, as well as larger hotels, from running out of cash and going bust.
"SkyeConnect is working with VisitScotland, other industry-bodies, the Chamber of Commerce network and other business organisations to press the case for urgent action.”