Stop spending money you don’t have

I recently wrote about trust, at the core of all our relationships, it is the emotional glue at the very centre of our family, communities, religion, work and what we buy and sell.

Our great travel industry, the industry that has been so good to me and many others, is now in dire straits.

The travel industry is particularly vulnerable to a stop or slow down, as it has operated as a massive “Ponzi” scheme borrowing and using up-front customer cash to operate. Cash taken from customers booking today for future journeys, pays for travel executed today that was paid for by customers two, three or even twelve months previously.

Airlines net profits exceed $220Bn in the last ten years. In addition estimated revenue for the worlds airlines in 2019 is estimated at $838Bn. If only $700Bn is flown revenue and most of these flights are booked with full payment on average two months in advance (return flights likely to have return sector much further in future) airlines have loans from customers in excess of $100Bn at any one time.


Yet many airlines now refuse to pay legitimate refunds to customers or to agent/Atol holders who in turn are legally bound to refund customers for cancelled “packages”. Why is this? I suspect they don’t have the money or they feel their survival depends on conserving cash and the easiest to execute is to refuse refunding. They’ve spent all that money and have been imprudent by not managing for recession or a catastrophe.

Bloomberg reports the good times have been wasted.

Instead, American blew most of its cash on a stock buyback spree. From 2014 to 2020, in an attempt to increase its earnings per share, American spent more than $15 billion buying back its own stock. It managed, despite the risk of the proverbial rainy day, to shrink its cash reserves. At the same time it was blowing cash on buybacks, American also began to borrow heavily to finance the purchase of new planes and the retrofitting of old planes to pack in more seats. As early as 2017 analysts warned of a risk of default should the economy deteriorate, but American kept borrowing. It has now accumulated a debt of nearly $30 billion, nearly five times the companys current market value.”

Atol holders, agents and operators alike that “tailor make” itineraries are little risk to the ATT (Air Travel Trust fund) but are treated disproportionately to large operators that take excessive risk by committing annually to thousands of flights and bed-nights. Some Atol holders may own an airline or own a portfolio of hotels.

Airlines and global operators have successfully lobbied governments to create an unlevel playing that fails to reflect the risk profile of the industry.

Airlines are now canvassing government for a bail out, yet they still retain billions in customer unflown revenue. If  banks or governments refuse to come to their rescue US carriers might seek Chapter 11 (Between 2002 and 2011, American, Delta, Frontier, Northwest, United and US Airways all filed for Chapter 11). In the UK Administration would apply, but in both cases customers would become unsecured creditors of the airlines for withheld refunds, in effect customers would lose their money. The liability would then lie with the Atol holder who unable to receive refund from airline would probably go bust leaving the taxpayer to stump up the money.

Regulators need to look at the whole problem. The biggest single problem is that airlines, the travel industries “Masters of the Universe” have spent money that’s not theirs. Conventional businesses only crystallise profit when they have supplied the goods. Airlines use the cash by promising to deliver good or services in the future.

The recent Air Insolvency Review is impractical, irrelevant and an embarrassment in its conclusion.

Abta has now appealed  to the government for changes to Atol refund rules. It poses as a protector of customer money when in reality it couldn’t control TUI or Thomas Cook, its two largest members, in breaking its Code of Conduct and damaging its fellow members. Abta is no longer fit for purpose, since its takeover by the Federation of Tour operators its agent members have become secondary. Now is the time for agents to become in control of their own destiny.

The industry is now suffering from its own virus and its very survival and trustworthiness is at stake.

The present bonding situation is untenable, it is unrealistic to bail out the airlines yet leave the financial liability at the feet of the Atol holder. Airlines should be bonded and be forced to place customer money in a trust account. There is no better time to enforce these changes than when the begging bowl is out.

A public that mistrusts the industry in future will be far more damaging in the long term than any financial impact at present.


I recently wrote an open Letter to Travel Counsellors regarding their attitude, self-belief and how they must tackle the present crisis.
I thought I might outline a few guidelines to protect your present business and even grasp opportunities that will expand it.
Firstly if you are a travel consultant your main advantage is that you are contactable. Yes, that is one of your advantages. Many consultants might try to avoid the customer at times but this is an opportunity to differentiate yourself from the digital agent. Contact is an opportunity so step forward and ask how you can help.
You should have built trust with your existing clients, if you haven’t then you need to. Trust is the glue that binds the customer to you.
There is actually a trust equation: (see

I hope this is self-explanatory as it is the most important quality in any sale by an agent.
Credibility is your honesty, your credentials, your experience.
So what to do in the present crisis. In the words of Woody Allen “Showing up is 80% of life” in other words be there for your customer at their convenience. Listen to their problems. Keep in touch, promise to call back, give the customer a time and call back at that time. That’s showing reliability. 
If there is a problem then empathise, explain the position and try to be constructive. Many customers will rebook for a later date, some will not be willing to. Remember these are customers that you should keep for life. There is no need to be confrontational, be nice, you are nice. If you’re not you shouldn’t be in hospitality.
Reliability is always do what you promise, if you can’t, admit you can’t, so contact your customer and tell them. Honesty builds trust.
Intimacy creates authenticity, show you are human, you have a dog, children, show your vulnerability but your expertise in your core competency. 
Self Orientation is being selfless, putting the customer before yourself, even disadvantaging yourself for the sake of your customer. 
All this builds a trusting relationship, one in which a customer will want to invest in just as much as yourself. Give something to your customer such as a kind gesture, a birthday card , a small gift and your customer will want to reciprocate. Give you a booking, a referral or just strengthen that bond you are building.
As this crisis takes its toll on business it actually strengthens the human bond between people, the humanity of people, though six feet apart, is the real story of this crisis.
People are looking for emotional connection, they want you to be there for them and that will only increase in the future. What about you? Well you will love it, you will be rewarded by being fulfilled yourself emotionally and also financially.
Enjoy yourself, the world of travel has been a great place to be in the past and will be great in the future. For now, build those trusting foundations with customers, a trust that will last forever.

Coronavirus – An Open Letter to all Travel Counsellors

Dear Travel Counsellors,
I have been asked by a number of you to just write a few words about the present situation. I do it as I still hold the TC family as very special.
These are unprecedented times but if there is one catastrophe that would highlight the need for a trusted travel consultant it would be this.
Remember this is when you excel, this is when customers want and need your help and those that booked themselves will wish they’d booked through you. This why customers book through agents, a big part of the deal alongside your experience is that you will be there for them if something goes wrong.
This is exactly why you became a travel consultant. This is the time when you can strut your stuff and customers want you to. This is your stage, your competency, do your job, enjoy and take the applause.
I know it’s difficult, but put the temporary issue of income at one side. I’m sure those in control at head office will come up with measures that will help. As you know everyone is busy but don’t worry, all will be okay. Many consultants will lose their jobs and you are still employed by yourself. You are in charge of your own destiny still. Hiccups happen in business but you still have a job, you still have customers, you still have a business. Now you must look to protect it and build it stronger.
You are working for a better life for you and your family, not just for the short term but for a year, five years, ten years. So you build your business now by doing the right thing now for future business.
People will start to travel again and if you have done the right thing more customers will realise your value. Give your present customers bragging rights to brag about you. You might not be able to solve everything but your authenticity and your willingness to persevere will shine through, you will retain customers and they in turn will refer you to others.
But now is the time to be fulfilled, to make your family proud of you and be proud of yourself.
Believe in yourself, people want you to care and they want someone they can trust. Trust is what you sell.
Credibility that you are part of a bigger company, reliability that you are always there and selflessness, meaning you will put your customers before yourself are the component parts of Trust.
Call your customers and chat to them,  just keep in touch. Don’t try to sell anything, your role now is to reassure, care, help and connect as they want someone to trust. This is the time to go beyond being a travel agent, you are a caring person and a phone call when you don’t have to make it will show your humanity and you’ll feel good. Tell them where they can get toilet rolls or just tell them you are at end of the phone. Be that person you are proud of, everything will turn out even better in future. More than business you will feel better about yourself and in control.

Stay positive not just for yourself but also for others. Customers need you to be positive and so do fellow TC’s. It’s easy to slip into negative thoughts but that will just be self-defeating, why score an own goal? Remember it’s your business, you empower yourself to set the tone around you. Call your fellow TC’s, laugh at the situation and talk about the opportunities and good times in the next few months. Include every TC. Call a TC that you have not previously spoken to, just like customers some want reassurance, many want to know that out there, others are handling the predicament. A problem shared is a problem halved but better, an opportunity shared is an opportunity doubled.
You are fantastic, just make your customers have it, believe in yourself, you can do it. That’s why you took that step to work for yourself, so now work for yourself.
God bless