Thai hotels seek government help as TUI Group defers payments

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Thai hotels seek government help as TUI Group defers payments

Thailand hotels have slammed travel giant TUI Group which is dragging its feet over outstanding payments for stays completed between January and March.

TUI has informed hoteliers it wants to defer the bulk of payments indefinitely and is asking them to sign new contracts.

Unsurprisingly hotels are incensed. Hotels are normally paid within 30-60 days after guests check out and TUI says it will pay 25% within 10 days - only after they sign the new contract.

 

The remainder of the debt is delayed indefinitely with hotels unsure of when they will be paid.

 

Full story: https://www.travelmole.com/news_feature.php?news_id=2042613

 

-- Travel Mole 2020 05-11

[dabhand]

How can TUI justify such a payment delay on completed holidays?

 

Presumably TUI have been paid up front by their customers, in some cases months in advance. So they are expecting the hotels to provide no cost finance whilst the hotels are suffering through having zero cash flow for many months as well as financing costs related to when these customers were staying at the hotels.

 

Then, to add to their dubious business practice, TUI are offering to release 25% of the hotel revenue but only if they signup for a further period. No doubt the new contract will include  a clause that makes their current actions legal. 

 

Disgraceful.

[martinhp]

15 hours ago, dabhand said:

How can TUI justify such a payment delay on completed holidays?

 

Presumably TUI have been paid up front by their customers, in some cases months in advance. So they are expecting the hotels to provide no cost finance whilst the hotels are suffering through having zero cash flow for many months as well as financing costs related to when these customers were staying at the hotels.

 

Then, to add to their dubious business practice, TUI are offering to release 25% of the hotel revenue but only if they signup for a further period. No doubt the new contract will include  a clause that makes their current actions legal. 

 

Disgraceful.

It's the way big companys do 

Our bank does business with us we borrow money they rent space for there atm both on contract. 

They despite the contract cut payment for the atm's with 68% 

They cut our interest rate with 0,3%

I personally think 68% is OK but only if it goes two ways they must cut interest the same. 

We made the deals in connection as the atm's is paying our interest +

But now not. 

Same like this

everyone wants other people to pay there investments which go bad now. 

But we and all the hotels are not the ones who is to blame. 

Better they fight the government who is to blame. 

But that's right

but not easy

but it would be worth it

so no matter what's going to happen they don't cross the lines again. 

They need to get learn a lesson not only the government here but all around the world. 

All you on pension where you think your money come from. 

Investing if go bad sooner or later you get less. 

And the rest off us is same limit work if not none. 

Result our savings go lower every day no matter have a lot or not. 

Only ones on top with all there connections will stay on. 

And we have to pay for them no matter we already lost. 

So this tui and banks are only the beginning. 

Else we must stand up now. 

And tell them off

but not easy and expensive too

but in the end we wind hopefully. 

Or we just loose every day same normally with tax and all the public services. 

The government here is not the only one who cheat the people it's every where

nobody do anything. 

 tui gets complain but nobody do anything 

Consequences is. It

is not going our way. 

Some complaints

but in the end all good kids do as they are told

and many ask how we live our life now we need directions.

I can see some people in here don't know how to live there life either without getting told. 

It's more scary than any virus 

[garzhe]

Disgraceful. Most booking agencies like booking.com hotels.com Agoda etc gave refunds to customers who had to cancel  and paid hoteliers promptly for completed bookings. Airbnb gave full refunds to cancelling customers and as a gesture gave 25% of the canceled bookings to the hosts.

I cant understand why anyone from Europe would come to Thailand on a package tour. Travel and hotel bookings so easy here. Who wants to be herded round like sheep.

I think there will be some big changes in the travel industry after this is over.

[xn47140]

And in Germany TUI got 1.800.000.000 EUR credit loans from the government.

 

https://www.sueddeutsche.de/wirtschaft/touristik-tui-bekommt-staatshilfe-1.4872675

 

I can vomit now and I can't look in the mirror anymore because I'm German.

[Letseng]

4 hours ago, xn47140 said:

And in Germany TUI got 1.800.000.000 EUR credit loans from the government.

 

https://www.sueddeutsche.de/wirtschaft/touristik-tui-bekommt-staatshilfe-1.4872675

 

I can vomit now and I can't look in the mirror anymore because I'm German.

Same story with LH. They openly admit that they can't do cash refunds due to cashflow issues. Quietly sanctioned by German government. Shame on the lot of them.

[ChipButty]

I dont know how TUI work but if like most of the other OTA's they have collected 100% before the guest arrives and in some cases many months before, the hotels rely on getting that money and getting it 30 days after the guest departs is outrageous, booking.com was similar but they did change it last year where you get paid every 10 days,

Airbnb was the best 24 hours after the guest arrives. 

[Letseng]

11 minutes ago, ChipButty said:

I dont know how TUI work but if like most of the other OTA's they have collected 100% before the guest arrives and in some cases many months before, the hotels rely on getting that money and getting it 30 days after the guest departs is outrageous, booking.com was similar but they did change it last year where you get paid every 10 days,

Airbnb was the best 24 hours after the guest arrives. 

TUI collected full payment 3 weeks before your holiday starts from what I remember. First payment is due when booking, usually months before the holiday.

[jonclark]

15 hours ago, Letseng said:

TUI collected full payment 3 weeks before your holiday starts from what I remember. First payment is due when booking, usually months before the holiday.

TUI i would imagine are being hit left, right and center from the customers who paid for holiday upfront now wanting a refund as they were /will be unable to go due to co-vid. I know the OP states that hotels want payment for completed stays, but all businesses rely on cash flowing through it in order to function - and that flow has stopped and many travel business are haemorrhaging cash and their insurance companies have headed for the hills at lightening speed.  Hence the proverbial well is dry. 

[dabhand]

8 hours ago, jonclark said:

TUI i would imagine are being hit left, right and center from the customers who paid for holiday upfront now wanting a refund as they were /will be unable to go due to co-vid. I know the OP states that hotels want payment for completed stays, but all businesses rely on cash flowing through it in order to function - and that flow has stopped and many travel business are haemorrhaging cash and their insurance companies have headed for the hills at lightening speed.  Hence the proverbial well is dry. 

That refund issue has minimal impact on TUI cash flow. They would merely be refunding monies that they have no need to pay out to the hotels as the holidays never took place (losing out on overhead contribution and future unrealised profit).

 

However, TUI are brazenly using monies owed to hotels for completed stays to shore up their business to the detriment of businesses that have spent money on TUI customers and are being denied reimbursement.  While, at the same time, as noted by another poster, receiving German taxpayers money by way of a loan. But not intending to use that loan to assist their business partners, unless they give into clear blackmail. 

 

This loan to TUI is also being noted by BBC:

https://www.bbc.com/news/business-52644291    

 

Their business practices stink to high heaven.

[ChipButty]

I've just been speaking to my daughter who booked her flight to come April and still not got her refund up until yesterday only after the bank stepped in, that was with Expedia 

[Letseng]

On 5/13/2020 at 2:45 AM, jonclark said:

TUI i would imagine are being hit left, right and center from the customers who paid for holiday upfront now wanting a refund as they were /will be unable to go due to co-vid. I know the OP states that hotels want payment for completed stays, but all businesses rely on cash flowing through it in order to function - and that flow has stopped and many travel business are haemorrhaging cash and their insurance companies have headed for the hills at lightening speed.  Hence the proverbial well is dry. 

This is why TUI got a cash injection of 180 million € in form of a KFW loan arranged by German govt. Why not pay the hotels? Afterall TUI has received customer payment.

Edited May 15, 2020 by Letseng