Reading the news headlines of ‘air chaos’ recently in Europe and North America you’d be under the impression that no one is arriving at their destination.
But how many flights are really being cancelled as a percentage of the total? Is this leading to hotel cancelations too? And what is the wider impact on the travel industry?
Spencer Hanlon, Global Head of Travel Payments at B2B payments provider Nium said: “We process significant volumes of B2B payments between tour operators or travel agents to settle with airlines and hotels around the world, particularly Europe and North America – and when a refund takes place we know about it. The reality is that, despite all the negative news, refunds of both flights and hotels in June were only a tiny bit higher than May’s, at 1.87% vs 1.73%.”
“And for what we’ve seen for July so far that has only increased again a tiny amount, with us estimating that July will see cancellations move up to just 2.38% (less than one in 40 bookings). If that sounds high consider that these figures are aligned with what we’d have expected for a summer pre-Covid.”
Mr Hanlon said: “Nonetheless, with further disruptions planned for this summer in the forms of strikes and many big airlines cancelling massively – evidently travel sellers and travel providers need to be braced for increases in refunds. For a lot of travel businesses – be they an intermediary or a provider – refunds are problematic not just because of lost revenue but because of the administrative headache involved.
“The smart companies have now long-since digitized and streamlined their payments and refunds processes, allowing them to cope with such volatility. But there’s still time to change, who knows that kind of volatility could be round the corner?”
