Vertical chief calls on operators to raise deposit fees
The chief executive of homeworking specialist Vertical Travel Group has called on operators to raise deposit fees to combat rising numbers of holiday cancellations.
Peter Healey said the number of customers pulling their plans was one of the biggest issues facing the sector, and said he expected the issue to get worse as the cost of living increases.
Many operators and airlines introduced low deposit fees and additional flexibility on booking changes in order to stimulate demand and rebuild confidence during the Covid-19 pandemic.
However, Healey said that approach is now presenting a “big challenge” for homeworkers across brands including Holiday Elite and Your Holiday Booking.
“One of the biggest issues we have now is tour operators competing with each other for the lowest possible deposit,” he told Travel Weekly.
“This means people aren’t cancelling because they need to cancel, they’re cancelling because they can cancel, and cancellations are a big challenge.”
He added: “Many consumers pay around £50 for their deposit and when it comes to the actual balance payment, it suddenly looks like a big number, especially with the rising cost of living, so they decide to do something cheaper instead.
“Tour operators can bring down the number of cancellations by raising their deposits up to a sensible number. I think £120 a head would be reasonable.”
Speaking during Vertical’s conference in Cyprus, Healey said the industry was “yet to see the true fallout” of the pandemic, and said he hoped to return to pre-pandemic turnover levels in 2023.
“We feel like we’re running at about 70% of what we should be running at right now,” he said. “This year we’ll turn over around £75 million across the group, but it should be £100 million. Our aim is to achieve that number in 2023.”
He added that Vertical Travel Group was in a strong position partly due to investment during the pandemic by the company’s technology arm Vertical Systems, which had “moved the business forward when it might have been easier to batten down the hatches”.
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