There were the pictures on television: People coming off Premier
cruise ships in the middle of their vacations because the vessels
had been seized by creditors. Angry passengers, their holidays
ruined, venting their frustration for the news cameras.
Once again the travel industry takes a beating in the consumer
media and I sit there wondering why this happens so often, why
companies that are failing can't exit this business without leaving
so much debris behind them.
My colleague, Bill Poling, a keen observer of the industry who
works out of Washington, reminds me that the travel business is
unusual in that customers pay far in advance for services to be
rendered by suppliers and a lot can happen in the interim. Goodness
knows that's true.
I can recall occasions when tour operators sent out vouchers to
passengers but hadn't paid their supplier bills for so long that
when the customers arrived at hotels, the vouchers were worthless
and the people had to pay a second time to be allowed to stay.
Their only recourse was to come home and sue everyone in sight
but often the perpetrator had filed bankruptcy and there was little
if anything left to be distributed.
When a debacle such as the Premier situation occurs, even with a
bond filed with the Federal Maritime Commission, clients and travel
agents aren't likely to get all their money back and even if they
do, it could take a long time.
What troubles me most about these kinds of events is the
long-term damage they do to the credibility of the industry, not
just the failed supplier but the travel agents who booked with
them.
Remarkably, despite a good deal of cautionary trade news
coverage about the precarious financial circumstances of a
supplier, a significant number of agencies continue to book with
them. Perhaps it's because these suppliers, knowing how shaky they
are, offer unusually good deals near the end of their run.
Or perhaps it's because too many agencies aren't paying close
enough attention to the fortunes of suppliers. In some cases, it
also may be that everyone, including the press, is blind-sided by
the failure of a supplier.
The sad fact is that when an agency books people with a company
that fails to perform, the agency has lost more than the goodwill
of that customer. It has lost the potential business of everyone in
that customer's circle of acquaintances.
Being an intermediary between a client and an unsound supplier
is one of the great risks facing the trade.