Cash conservation has become the top most priority as lack of demand is affecting the balance sheets. The credit note, an alternative to a cash refund, is now being widely used by the operators in their cancellation policies in a bid to preserve cash. The additional incentives are enhancing the appeal of credit notes that are enticing the travelers to opt for this alternative rather than a full cash refund, says GlobalData, a leading data and analytics company.
Johanna Bonhill-Smith, Travel & Tourism Analyst at GlobalData comments: “Additional bonuses that have been initiated on top of credit notes will boost the appeal of this alternative refund method, helping companies to preserve cash when reserves are depleting.
“There has been much scepticism surrounding the credit note on the dates it can be used and ATOL (Air Travel Organisers License) protection. But certain operators are undoubtedly promoting this more effectively than others and are likely to encourage more travelers to take this option.”
TUI Group has introduced an automatic refund credit for travelers holidaying before 15th May 2020; an additional 20% credit has been added onto the booking.
Jet2 Holidays has updated the amendment policy, enabling travelers to change dates of their holiday in exchange for a discount of US$125 (£100) off if booked before 31st March 2021 and US$75 (£60) off if booked before 1st April 2021.
Bonhill-Smith concludes: “Depleting cash reserves is a worry faced by all operators as travel has come to a standstill. It is likely all companies’ managements are urging travelers to opt for the credit option rather than a full refund, thus additional incentives are an effective way to boost the appeal.”