Open letter to AFTA, the Australian travel industry and whoever else will listen... (continued)

I AM of the opinion that in the initial reactivation stage activity will be severely subdued. Any business will require capital to cover reactivation costs until activity increases to a point that a business becomes economic.

Big question… all businesses have clients that we have obligation to see through existing transactions completed. - How many uncompleted refunds are still outstanding, which despite your best efforts you cannot complete?

- How many of your clients are holding credits on transactions that you undertook on their behalf?

- Does anyone have outstanding live bookings for travel commencing sometime in the future, that your clients do not wish to cancel at this time? Who would have thought that future business would be a liability?

- If you close your doors, how will these bookings, refunds and credits be handled to completion for your clients? Who can I pass these outstanding obligations to, that can be trusted and at what cost?

Introducing... the Agent of Last Resort

Has Armageddon occurred? Based on the recent Travel Daily survey, a possible conclusion is that Armageddon has already occurred (it’s not what I thought Armageddon would look and feel like) and JobKeeper is just kicking the can down the road.

Even if JobKeeper is extended, how many are willing to risk precious capital on extended hibernation without other significant financial assistance that will not create future obligations?

How long is the travel industry’s piece of string?

How many destinations, or better selling skills webinars can you bear?

Note: The Administrators of Virgin Australia have stated that $100 million in outstanding Australian travel industry created credits exist. How large are the outstanding refunds, credits and live bookings across the entire industry?

AFTA’s role in creating the Agent of Last Resort

I am calling on AFTA (as no commercial organisation can be trusted or relied upon to be here in the post COVID-19 world) to request funding from the Federal Government to create and fund the Agent of Last Resort and to:

1. Establish offices in all states and territories.

2. Provide funding to operate the Agent of Last Resort for a period of 3 - 4 years.

3. Obtain additional funding to provide grants and training to employees to assist with reestablishing the retail and corporate Australian Travel Industry.

4. To have grants available to businesses that have made it to the other side to assist with providing wage subsidies for expansion and traineeships while trading is subdued.

The Agent of Last Resort would maintain a core skill base of individuals who will be the entrepreneurs and employees of the new travel agencies post COVID-19. Think of it like the seed bank that exists post any apocalypse to provide food for the world. I know this sounds dramatic, yet what is the alternative?

The Agent of Last Resort will at no cost take on the management of any outstanding refunds, credits and live bookings. This will allow agents to effectively shut up shop without exposure to potential litigation from former clients in relation to outstanding issues. It would also not become a distributor of sales in the recovery, but be purely a warehouse to deal with resolution of legacy issues - because those agencies that make it to a post-COVID world must not be competing for new transactions against a government-resourced competitor.

This outline is intended to form the basis of a dialogue that needs to commence within the Australian travel industry immediately. If we accept this is a reality, the next step is not just an orderly shutdown of businesses. The discussion must include assistance for all those who have worked and owned businesses in the industry, which can no longer feasibly operate in the current economic climate due to ongoing border closures.

The Australian travel industry has been destroyed not by misadventure or excessive risk taking, but by a pandemic! AFTA must lobby the Government to also provide a safeguard for the financial and mental health of industry participants during a transition period. Very few if any other industries, to a person, have been wiped out as the Australian travel industry has by this pandemic.

Over to you AFTA.

PS. Please stop the meaningless and endless destination and selling skill webinars ASAP and start talking to the Australian travel industry like we are grown-ups. We are big enough to handle the truth!