Unsettled disputes between tour operators and airlines may exacerbate the tourism situation in Thailand by forcing outbound wholesalers to exit the market, with more layoffs.
The global coronavirus pandemic has created significant impacts to global tourism as the World Tourism Organization (UNWTO) has predicted a contraction of international arrivals by 1-3% with an estimated loss of US$30-50 billion in receipts, a sharp reversal from the previous prediction of 3-4% growth this year.
A dispute between airlines and tour operators regarding refund policy is triggering more serious financial problems for tour operators in Thailand, particularly wholesalers for the outbound market, said Chotechuang Soorangura, head of a committee of the Thai Travel Agents Association (TTAA).
He said some 40 wholesale companies may exit the market soon as they have already booked advance aeroplane seats worth 30-40 million baht.
The Office of the Consumer Protection Board asked companies to return deposits or payments to affected customers, but the companies claim they have limited cash flow as they haven’t received full refunds from airlines.
According to the Tourism Business and Guide Act of 2008, if tourists cancel tour packages with tour operators 30 days before the travel date, a full refund is applicable after deductions for related services such as visa fees and flight deposits.
For any cancellations made within 15-29 days before the trip, consumers should be refunded 50% of payments.
If customers cancel the booking within two weeks of the trip, they cannot get a refund.
Mr Chotechuang, also associate managing director of NS Travel and Tours, said the impact has hammered small and mediumsized companies, a number of whom ceased operating since February. If wholesalers, who normally have bigger operation size, cannot solve this problem, more employees will be laid-off.
“Thailand has unclear procedures for controlling the disease. The lack of credibility has prevented international tourists from coming to Thailand, severely limiting the inbound market,” he said.
“The lack of confidence among domestic travellers is another problem. If outbound tour operators are not given some assistance, we expect employment in the tourism sector to worsen.”
Mr Chotechuang said tour operators understand the financial constraints of airlines, but a solution is needed that sees both sides splitting the losses equally.
Meanwhile, Thanapol Cheewarattanaporn, president of TTAA, said even though the Tourism Department has positioned itself the mediator and is trying to find a solution by using refund regulations, this approach has yet to be effective.
He said airlines mostly offer credit shell instead of money, thus making it difficult for tour operators to process refunds to tourists.
“In times of crisis, close cooperation between state agencies is needed. But there is no plan to resolve the issue collectively,” Mr Thanapol said.
He expects the Tourism and Sports Ministry will jointly work with the Transport Ministry or the Civil Aviation Authority of Thailand to bridge cooperation with airlines and help resolve disputes.
