Insolvency in sight for many

Companies and businesses suffer from the dramatic consequences of the corona crisis. Travel agencies and bus companies are also affected – not only in germany.

Monika max from the TUI travel center in hochstadt reports: "each of our three branches is affected. Whether a large or a small travel agency – it is now necessary to work together in the industry." Every travel agency struggles with the same problems. "Many travel agencies suspect that they are already insolvent", says max. But at the moment no one has an overview of the true extent of the crisis. "For our team, the direct contact to our customers is currently in the foreground. This includes a huge number of unsettled customers whose vacation trip is about to begin. But also a large number of those who are currently abroad and are also very unsettled", max continues. "Divided between emergency services and home office, our madels are currently giving their all to meet all questions."

This is all service without earnings, but on the contrary "our companies must pay back the commissions that have already flowed for work done". Because with cancellations on the part of the organizer there is no commission. A lot of money is being claimed back and no new bookings are being made at the moment.

What these cancellations mean for your travel agency, max explains: "in other industries, it’s like when a customer brings back last year’s items in a boutique, shoe store or supermarket, and the company has to pay the customer back in full. Therefore, no travel agency has a real financial overview at the moment, as it is not yet foreseeable how long the wave of cancellations will last." Max is full of praise for her team, which "shows full commitment despite short-time work and the many sad travel cancellations".

They are very optimistic now and are planning group trips for the fall. "Last monday we flew to cuba with 15 people. The trip had not yet been cancelled by the operator and the decision was ours, which was very difficult for us. But now we and our customers are grateful that we canceled this trip on our own responsibility", the head of the travel agency emphasizes.

Omens ignored

The travel agencies had already started to feel the effects of this long before. Unfortunately, no one has mentioned this. After the crisis, even some airlines may cease to exist. This means that the market will be tight until everything starts up again: "but the government has promised us a lot of help, and the travel industry has already survived many crises and bankruptcies."

Local travel agencies also receive calls for help from internet bookers who are stuck abroad or can’t get anyone on the phone for their trip in the next few days.

Despite the crisis, the main hope is that "people will remember their regional traders and service providers – such as us travel agencies – and appreciate the added value of a trustworthy contact partner again when the crisis is over."

Ben schneider from the travel agency auszeit hemhofen says: "yes, the situation in the travel agencies is catastrophic. This crisis will show who will be left in the end." Anyone who heard carsten spohr’s speech at lufthansa’s annual press conference knows "how dramatic the situation is for the entire tourism industry". At the moment, for example, TUI cancels all departures until 30 september. April.

Sabine barry, a german travel agent from killarney in ireland, who has been organizing group trips for the castlebar circle of friends – like the trip planned for the end of april and now postponed for a year – writes that due to the corona virus she receives cancellations, booking requests and e-mails from concerned customers on a daily basis: "for us as an ireland tour operator the season is very short, because trips are only booked from april to mid october. The fixed costs such as hosting fees, rent, electricity remain the same every month, no matter how many trips we sell." Barry has 1,5 employees. "I had to expose one employee. The full-time employee is now working short-time." Barry is very hopeful that she will qualify for the state’s emergency assistance program (anyone who has lost their job due to the virus will receive 203 euros a week for six weeks in ireland). "I, as a businessman, cannot pay myself a salary for the next few months, but I will also be supported by the state for six weeks. Without my husband’s financial contribution, I could not continue to operate", emphasizes barry.

Many customers already want to cancel or rebook trips booked for may and june, adds the travel agent. "We can currently guarantee a free rebooking and then offset the deposit amount against it. Most customers understand this, as does the hochstadter travel group, which has now rebooked the trip for spring 2021."

The crisis also affects all bus companies. Klaus kohler of kohler reisen: "not just us, but bus companies all over germany have been hit by the corona crisis. For the past four weeks we have been receiving several cancellations of school, company, club, trade fair trips, etcetera, on a daily basis. In the entire region, bus services are only operated according to the vacation schedule or, even worse, according to the saturday schedule."

One third of the buses are at a standstill

This led to kohler deregistering a third of his fleet in order to save money. Since monday, he has applied for short-time work to avoid layoffs for operational reasons. "It is curious that – after there was a massive shortage of drivers just three months ago – there are now surpluses. The longer the crisis lasts, the more dependent the entire industry will be on support, as the companies alone will not be able to cope with the massive cuts."

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