Inbound operators face cash crisis as suppliers delay setting 2021 rates

Inbound operators are pleading with UK hotels and attractions to get their 2021 rates out urgently so they can get booking for next year and avoid financial catastrophe.

UKinbound CEO Joss Croft said his members were experiencing ‘the strange situation of hotels and some attractions not giving trade rates – even though their operations are running at low occupancy’.

He said: "Because a lot of attractions and hotels are having to operate at reduced capacity, they are not that willing to offer trade rates to the operators. They want to maximise yield on the limited number of customers coming through the doors. That’s giving my operators a real problem.

"Some suppliers are waiting to see what 2021 looks like and the other factor is that many yield managers are on furlough.

"We have 140 operators and members. With over 50% of all people booking through an intermediary, those operators are critical.

"It’s important on an economic front because, a lot of the time, it’s these operators that drive the regional tourism economy. These hotels and attractions wouldn’t get the visitors without the tour operators.

"Here we are in July. Major markets like the US still aren’t allowed in [to the UK].

"People want to push back their bookings until next year, which is great news for the UK. But not knowing rates is starting to become a real issue. I was on a call this week with operators based in the US and they want to start getting booked in for their clients now. The bookings will turn into deposits, which will turn into valuable cash flow."

London has been particularly badly hit, but the problem affects tourism to the regions as well, Croft said.

A small number of suppliers, including GLH Hotels and Jurys Inn, have released rates and are now seeing bookings coming though, but many suppliers are still holding off.

This week, UKinbound revealed 88% of tour operators and destination management companies (DMCs), who are responsible for bringing in and looking after over 50% of all international visitors to the UK – and over 70% of visitors from the USA and China – are set to make large scale redundancies as a result of the Covid-19 crisis, unless the UK government provides more financial support.

Research among members showed 60% will be forced to make further redundancies in August when the Coronavirus Job Retention Scheme tapers off and 88% expect to make between 25% and 100% of their staff redundant.

Over half (53%) expect their business to last no more than six months.

"Tour operators have provided business and showed a lot of loyalty to suppliers and we’d like to see that loyalty being paid back at a time when our members really need it.," Croft added.

"Our tour operators are in desperate financial straits."

By Lisa James, Deputy Editor (UK)