It’s happened again. This time it’s the Zika virus that is impacting travel throughout South America, Central America, Mexico and even the Caribbean. It began in Brazil, which is top of mind these days for travelers because of the upcoming Olympic Games, set for August in Rio de Janeiro, but quickly spread to other countries.
Every few years the global travel industry is hit with a virus scare, from H1N1 flu in Mexico to bird flu in Asia and the Ebola crisis in Africa. Zika fever is particularly alarming – an almost symptomless disease that is undetectably mild in most adults but in pregnant women can cause terrible birth defects in their babies. It is also particularly fast moving with a number of cases now reported in Florida, including three pregnant woman and just this week Philadelphia announced the city’s first case identified in a 60-year-old women who recently returned from the Caribbean.
So what do you do as a travel advisor when faced with a cancellation due to a virus scare (or any other major world event, such as a terrorist attack or weather-related incident). For that matter, what do you do as a hotelier or resort operator when such cancellations start to really hit your business? Clearly there is significant economic impact which needs to be addressed between the travel advisor community, their clients and their hotel partners in such times of crisis. How to control the impact all comes down to how you as a travel advisor and you as a hotelier manage the communications process.
PROVIDE AN OFFICIAL UPDATE
When confronted with a client who wants to cancel because of a crisis situation, advisors should discuss the most up-to-date official information. In the United States, the Centers for Disease Controls ( http://www.cdc.gov ) and/or U.S. State Department ( http://www.state.gov ) are the official sources of information for such incidents. Referring customers to these sites, or even forwarding them articles in the consumer and trade press, can make sure they are fully informed. This may help alleviate cancelations for example in destinations not affected with the crisis.
SELL TRAVEL INSURANCE UPFRONT
As a travel advisor, one of the most valuable services you can provide to your client is to sell them travel insurance. Many policies however, don’t cover cancellation fees and other expenses related to crisis situations and calamities, so research those insurance companies that provide coverage “cancel for any reason”. If your client doesn’t want to buy insurance, make sure they sign a waiver showing they declined coverage.
DON’T OBJECT TO A CANCELLATION
If a client decides to cancel regardless of the official information available, that’s when the travel advisor and the hotel or resort has a real challenge. Do you penalize the client if cancellation deadlines have passed, or do you seek to negotiate something with that client in order to keep their current and future business.
My advice to travel advisors in these situations is to let the client cancel and then you must decide if the cancellation fee can be negotiated with the resort. In many cases the client is willing to pay the cancellation fee to avoid any potential danger.
PROVIDE CANCELLATION FEE OPTIONS
For hotel and resort owners or managers, the question becomes whether to charge a fee for cancellations close to arrival dates. Such fees are usually a part of a contract for both groups and individuals, so it is a generally accepted practice. At the same time, you also can offer a credit on future bookings, so as to mitigate the potential loss for your customers and create good will for the future.
Hoteliers can also consider waiving a portion of the fee or all of it, in favor of rebooking the client at a later date, especially if that client is highly valued or is being booked by a valued travel advisor partner. I have heard recent cases where the hotel or resort not only got the cancellation fee, but also was able to rebook the vacated rooms at a higher rate (though that’s the rosiest of all scenarios).
OFFER TO REBOOK
As a travel advisor, you should offer to rebook your client in the same hotel or resort at a later date, and if that’s not possible, you should try to book your client into a hotel or resort that is located in an area not hit by the crisis. That way you don’t lose the relationship you have with your client and you’ve provided extra service in the rebooking.
Yes, this can cost time and money, but there really is no alternative, and should be considered one of the service benefits you offer as a travel advisor. In the best-case scenario, you end up rebooking at a hotel or resort with a higher rate, thus generating a higher commission.
CHASING LOST REVENUES AT DISCOUNTED RATES
As a hotel or resort owner or manager, one common response to cancellations is to lower rates either directly or through online travel agencies. This can have long term impact for the perception and value associated with the brand, and it might be difficult to recover and raise rates when the crisis is over. It may be unavoidable, but make sure you’ve exhausted all options to fill rooms before discounting your room product.
FIRM UP YOUR RELATIONSHIPS
Before the next crisis strikes my advice is to be prepared. Take the time now to firm up travel advisor relationships with clients and preferred suppliers alike, to understand how best to respond in both worst, and best case scenarios. Understand lines of communications with suppliers when a crisis hits, and create an atmosphere where friendly negotiation can lead to a win-win-win for all parties and elevate trust levels between all parties.