The COVID-19 pandemic has upended our normality and in such instances, people tend to feel that they have lost some control. Of course, there are certain things for which we are reliant on Government, for example, a date for reopening the tourism sector. And to that end, SATSA is working fervently, through the TBCSA, to make this happen.
However, in the spirit of “controlling what you can control”, if there are two things you have the power to do something about or at least start thinking about this week, if you haven’t done so already, it is:
- Saving South Africa’s forward book for our upcoming peak season
- Reducing or removing the customer’s ‘fear’ around new booking confirmations
Saving South Africa’s forward book
We are fast reaching the 60-day booking confirmation window for September travel, the start of our peak season.
While a date has yet to be set for the opening of our borders, there is fervent lobbying behind the scenes backed up with a data-driven recovery strategy and robust health and safety protocols to ensure a safe phased reigniting of inbound international travel.
But until that date is set, customers will be wary of confirming bookings. So while those customers, who are scheduled to travel in September and October, may well be able to travel, the requirement to confirm their booking 60 days out without confirmation that borders will be open means they will simply defer or cancel their travel.
According to a TBCSA survey at the end of May to establish the current forward book value, the 105 inbound and DMC respondents held a forward book for South African business for the 6 months September 2020 to February 2021 to the value of R771 million, which represents 40% of their budgeted R1,9bn turnover for the period.
Most businesses were still holding bookings for travel starting in the next few months with 13% holding from July, 17% from August, 19% from September and 20% from October. Only 12% have cancelled or postponed all bookings till 2021.
By instituting more flexible booking policies in the short term and shortening your cancellation penalty periods to 30 days or even 15 days prior to travel, you allow customers and guests the space and confidence to retain their September bookings in the short-term while we await confirmation of our reopening date.
Remove the ‘fear’ around new booking confirmations
SATSA members have been asking for some guidance on issues within the Value Chain in times of COVID-19 and beyond. In the absence of clarity and divergent opinions, even between members from the same sector, we undertook to navigate these murky waters on behalf of our members through webinars and our SATSA Discourse, among others.
To forge a consensus, we convened a SATSA thinktank last week around reimagining the value chain in times of COVID-19 and beyond. It included leading DMCs, direct sellers and accommodation representatives and unpacked the issue of deposits and pre-payments, the ‘fear’ around these which hinders demand, the root causes of that ‘fear’ and possible solutions.
The thinktank’s opinion is that the requirement for any form of non-refundable deposit will, therefore, remain an impediment to demand because the guest and or customer is unsure whether their deposit will be returned to them should they need to cancel as a result of COVID reasons.
This is because they are not convinced everyone in the chain is going to survive this and/or because the pre-COVID response was not consumer-friendly. There is real ‘fear’ which is an impediment to them booking.
By removing the ‘fear’ around the refunding of customer and guests’ deposit, we will drive confidence and demand.
We can remove that ‘fear’ by offering a full refund for any COVID-related cancellations and there are two potential ways of doing this:
- Require guests to pay a refundable deposit on confirmation:
o Define clearly that deposits will be refunded in full in cases of force majeure relating to COVID-19
o Define that deposits will not be refunded in cases of ‘disinclination’ to travel
o Provide proof of solvency through audited statements (Customer trust)
o Different approach or flexibility for ‘regular’ vs ‘unknown’ customers and contractual B2B versus ad hoc B2C customers- Reward regulars and volume
o DMC has to pass liability and payment demands on to customers
o A hybrid approach to paying refundable deposits to suppliers, e.g. deposits to be paid to secure a booking in cases where the supplier can a replace that provisional booking with a confirmed booking
o Suggested transparency in terms of how the deposit is split between conservation and community vs tourism (accommodation)
- Don’t require guests to pay a deposit on confirmation, then manage your risk:
o Understand your contractual obligations
o Different approach or flexibility for ‘regular’ vs ‘unknown’ customers and contractual B2B versus ad hoc B2C customers – Reward regulars and volume
o Only require deposit to secure a booking in high-demand periods (i.e. when inventory can be confirmed elsewhere)
o Ringfence the deposit (the guest puts the deposit in trust)Endorsed by:
An African Anthology, Cullinan Holdings, Fancourt, Go2Africa, Kobo Safaris, Micato Safaris, Ondese Safaris, Private Safaris, TSC Group, Tswalu Kalahari, Wild Wings Safaris. Will you add your voice to this collective? Email communications@satsa.co.za
The rest of the world is starting to open up, and part of that opening up and the normalisation of COVID means our traditional source markets are starting to think about where they’re going to travel to and plan.
Traditionally, we have relied heavily on DMOs, such as South African Tourism to do our marketing for the destination. In this new world, there is a distinct shift in how we’re going to compete with other destinations and the ease of booking is one key aspect. This is a suggested approach, but will only become meaningful if we can support it as a collective.
David Ryan from Rhino Africa reports definite increased interest in travelling to Africa, especially from source markets like Spain, Germany and North America. He says clients are looking for more certainty around the eco-system and booking conditions.
Simply by offering a more flexible booking policy, Rhino Africa has been able to drive demand and conversion.
While Industry lobbies strongly for the lifting of Government-imposed travel bans, there’s an opportunity for us to align our T&Cs to provide greater certainty that if the customer or guest has to travel as a result of COVID-19, they will be covered.
The more flexible our cancellation policies are for the remainder of 2020, the less likely that travellers will cancel for fear of incurring fees, particularly for September and October. It must surely be in everyone’s interest to hold onto confirmed bookings as long as possible, to allow the fluid situation of inbound travel opening up to unfold.
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