Tour OperatorsWholesale operators with millions of baht in advanced seats could be forced to fold if dispute with airlines continues

Thailand’s tour operators face cash flow woes over refunds dispute

By
|
Serious financial problems loom especially for Thailand’s wholesale tour operators who are locked in dispute with airlines on refunds for travellers.
Serious financial problems loom especially for Thailand’s wholesale tour operators who are locked in dispute with airlines on refunds for travellers. Photo Credit: Getty Images

BANGKOK – Thailand’s tour operators and airlines are locked in dispute on refunds for travellers that could force wholesale tour operators to cease business, a problem that is facing operators in other destinations.

More serious financial problems loom for tour operators, especially wholesalers for the outbound market, said Chotechuang Soorangura, head of a committee of the Thai Travel Agents Association (TTAA).

He revealed that some 40 wholesale companies could exit the market soon as they have already booked advance flight seats worth 30 to 40 million baht (US$927,930 to US$1.23 million).

Thailand’s Office of the Consumer Protection Board to return affected travellers their deposits or payments, but companies have claimed they have limited cash flow as they wait to receive full refunds from airlines.

Tour operators must provide a full refund to tourists who cancel their tour packages 30 days before the travel date, according to the Tourism Business and Guide Act of 2008. This excludes visa fees and flight deposits.

Travellers who make cancellations within 15 to 29 days should be refunded half their payments, while travellers who cancel within two weeks of the trip are not entitled to a refund.

The impact of cancellations has severely impacted small and medium-sized companies, with a number forced to cease business since February, according to Mr Chotechuang, who is also the associate managing director of NS Travel and Tours.

He points to Thailand’s unclear procedures for controlling the disease that has prevented international tourists from coming to Thailand. Another contributing factor is the lack of confidence among domestic travellers.

“If outbound tour operators are not given some assistance, we expect employment in the tourism sector to worsen,” he said.

Mr Chotechuang said that while tour operators understand the financial constraints of airlines, a solution is needed that sees both sides splitting the losses equally.

TTAA’s president Thanapol Cheewarattanaporn said that while the Tourism Department has positioned itself as a mediator to attempt to find a solution through refund regulations, the approach has yet to be effective.

As airlines mostly offer credit shell instead of money, it has made it challenging for tour operators to process refunds to tourists, he said.

“In times of crisis, close cooperation between state agencies is needed. But there is no plan to resolve the issue collectively,” Mr Thanapol said.

He expects that the Tourism and Sports Ministry will work with the Transport Ministry or the Civil Aviation Authority of Thailand to bridge cooperation with airlines and help resolve disputes.

JDS Travel News JDS Viewpoints JDS Africa/MI