I run a large travel agency in Jerusalem. Like everyone all over the world in the tourism industry, the coronavirus has decimated us. I've sent 38 of my 41 employees on two months unpaid leave. Along with one agent and one person in accounting, we've been coming into the office to work. Now that is no longer an option. Do I believe that after two months, the virus will have been pushed back and life will return to normal? Sadly I do not.
In the last two weeks we've been preoccupied with four different items: retrieval, repatriation, renewal and refunds.
Israelis by their very nature are inveterate travelers. Low-cost carriers flourished in Israel; new airlines to exotic locals thrived. Reason is we are not just the wandering people but the travelling people. From post-army adventures to golden age tours, going abroad has been the birthright of almost every Israel.
Now with the pandemic, the skies are closing. Entire countries are shutting their borders, closing their airlines and refusing to let tourists in. Like most of us, health is high up on their list of concerns and many of the countries that Israelis found themselves situated in were not known for first-class hospitals. Coupled with our own Foreign Ministry's summons to return home, they have bombarded the airlines and agencies with their fervent plea. El Al, Arkia and Israir took the initiative when there were no scheduled airlines to bring their citizens home. As far distant as Perth to cities in Italy, the three Israeli airlines showed their mettle.
Israel attracts a myriad of tourists and students, from the well-known yeshiva students to the surfeit of overseas programs that are offered. As soon as those programs were shut down, those budding scholars wanted to depart the country. As airlines cancelled their flights, it was no easy task in finding reasonable solutions.
No foreign country sent their planes to assist them, so they were forced to pay any price they could to depart Israel. To the US, for example, the only two nonstop flights to either Newark or JFK can only be flown on United Airlines and El Al. Delta stopped coming to Tel Aviv quite quickly and Air Canada also pulled up stakes. Low-cost carriers like Ryanair shut down completely with no planned flights until after May 31.
Almost all the European airlines ceased flying. (British Airways has been the shining example of continuing a daily flight from London.) So, getting those partakers of Israeli programs out of the country was no easy task
While the airports are empty and the airlines that still fly quite uninhabited, this is still a temporary situation. We will get over this nightmare. We will wake up one day with COVID-19 in the rear-view mirror. It may be in the late spring, or in the summer. The airlines have already anticipated buyer trepidation. Most are permitting free changes and all have opened their lower classes in the hopes that there are certain people who will take the plunge and book a ticket. My office recently sold three tickets to Rome for August along with a cruise. Even I guffawed with the client on his optimism.
The majority of any travel consultants time these days is spent on one item and one item only: sending tickets in for cancellation.
If an airline cancels your flight, the law is clear, they must refund you. That’s why I always advise people to wait until the last minute to cancel their flight to see if the airline winds up cancelling the flight. If you cancel when the flight is still in the system you will incur the regular cancellation fees.
In Israel, most airlines process their credits and debits through the Bank Settlement Plan. BSP is designed as a clearing house and works quite simply. Every ticket issued in a calendar month is remitted on the 18th of the following month. Every ticket that is sent for refund is deducted from that remittance. And thus the passenger should get his credit immediately after the airlines have refunded it.
What happens though when almost no tickets are issued, and rather than reducing the refunds from what is owed the airline must make massive remuneration to the travel agent? Or worse, what if an airline, say United or Air Canada, decides it simply won't have the cash flow, so it demands that the passenger gets a credit that can be used for 12 months. And only at the end of that period, if unused will they refund the money? That's what is happening today in the travel industry.
Many airlines, like El Al, have stated unequivocally that they will remit the money on April 18, while others, United, for example will only offer a credit. I'm not even certain this is legal but leave it to aviation lawyers to delve into that.
What are your options if they refuse to give you the refund, in full? You can dispute the charge with your credit card. Just note that if you used a personal travel agent and if they charged your card that you’ll be taking the money out of their pocket rather than the airline’s pocket. You can file a complaint with the Transportation Ministry or with the relevant Israeli consumer association.
If those options fail, you can take the airline to small claims court. I understand the airlines. Many will go out of business if the governments don't step up. El Al, Arkia and Israir have been negotiating with the Finance Ministry and to date an agreement has not been reached. Same with the US carriers beseeching for some relief. In principle the Trump administration agrees but to date nothing has been signed. The Italian government, for years trying to sell off Alitalia, was forced to step in and cease all attempts and have agreed, for now, to completely support them. Lufthansa has already asked the German government, and rest assured every airline will be asking their local authority for assistance.
2020 is over. Whatever revenue is salvaged will not cover the billions lost in the tourism industry this year. The cruise industry along with the hotels will need at least a year to recover. There will be many bankruptcies. The effect of the novel coronavirus on human life is what is discussed constantly; the economic effects will be far deeper and will result in a brand-new paradigm. We will not return to normal for some time.
With high unemployment and so many people forced to cut into their savings, there will be little disposable income for leisure travel. Some have opined that when it's over, the pressure of quarantine and not being able to travel will result in a surge. Poppycock! Economic realities will not permit such a surge. Normalcy for most will be to return to their daily lives. Taking a vacation overseas will be a luxury.
Business travel too won't suddenly return to normal. There are no conferences planned for the summer, no Olympics in Japan. Business clients won't need to travel for several months once we return to our normal cadence.
It will recover faster than leisure travel as new conferences will be set and contracts will need to be signed. This will take time though. Client retention is still the most important attribute in the tourism industry. If the hotel you booked in Tahiti, chooses not to take a cancellation fee, you'll book again. If the airline accommodates your refund request, they will have bought your loyalty. And if you used a travel consultant who handled your every need, you will continue using their services.
The best way to know a company or a person is within a crisis. How they handle themselves and their clients today will determine if they succeed tomorrow.
Mark Feldman is the CEO of Ziontours, Jerusalem.
For questions and comments email him at firstname.lastname@example.org