Tourists travelling to Greece have raised concerns about the impact a financial collapse will have on their travel plans.
Media reports confirm that the country’s stock exchange and banks were closed after the European Central Bank (ECB) said that further credit to Greece was being refused after the eurozone rejected further bailouts. Further reports add that Greek citizens have been queuing up at ATMs to draw cash, although they can currently only withdraw up to €60 a day.
The nation will be holding a referendum to vote whether it will remain in the eurozone. If Greece votes no, tourists are being told not to worry as the impact will be marginal. Tourism companies will likely continue to quote rates, and accept payment, in euros for the benefit of visitors from the single currency area.
The UK Foreign Office latest advice states: “Visitors to Greece should be aware of the possibility that banking services – including credit card processing and servicing of ATMs – throughout Greece could potentially become limited at short notice. Make sure you have enough Euros in cash to cover emergencies, unforeseen circumstances and any unexpected delays.”
The US Embassy in Athens has said: “Citizens are encouraged to carry more than one means of payment (cash, debit cards, credit cards), and make sure to have enough cash on hand to cover emergencies and any unexpected delays.”
The Government of Canada has issued the following advisory: “Banks in Greece are expected to be closed from June 29 to July 7, 2015. Withdrawals have been restricted to 60 EUR per day until further notice. Expect long lines at ABMs and a shortage of hard currency throughout the country. Plan to have more than one means of payment (cash, debit cards, credit cards) and ensure they have enough cash to cover unexpected travel expenses.”
The Australian Department of Foreign Affairs and Trade for its part issued an advisory saying:” Visitors to Greece should be aware of the possibility that banking services including credit card processing and servicing of ATMs throughout Greece could become limited at short notice. Daily ATM withdrawal limits do not currently apply to most major foreign debit/credit cards. Make sure you have more than one means of payment with you (cash,debit cards, credit cards), and make sure you have enough money to cover emergencies and any unexpected delays. Petrol stations may not accept credit card payments. The level of the advice has not changed.”
- Greece travel advice Q&A: Tourists urged to bring cash not cards on holiday
- Q&A Should I be worried about Greek Holiday
- Greek Travel Advice: Do tourists have cause for concern?
- Travelling to Greece for a holiday? You’d better have plenty of cash
- How the Greek financial crisis could affect your holiday plans
Advice for travellers
- €60 restriction on withdrawals does not apply to people who hold bank cards from outside of Greece although there are reports that some ATMs have run out of money and are no longer able to dispense cash.
- Cash will be the best form of currency for travellers, although multiple means of payment are advised.
- Take extra security precautions carrying cash. Use safes and deposit boxes to store cash and split money between family members so that no traveller carries too much around with them.
This time, the Department of Home Affairs, which normally takes two months to hand over tourism and migration statistics to Statistics SA (which in turn takes about three months to interpret them), has managed to pull a rabbit out of a hat in a bid to counter the negative publicity questioning the logic of the recently introduced regulations.
The DHA astonishingly released the first three weeks of June tourist arrival statistics in a matter of a few days. At last! We’re dealing with some valid form of statistic, although in the DHA’s opinion the drop is “not as significant” as the tourism sector has “opportunistically” claimed and actually the economic decline and Ebola should also be examined as causes behind any downturn.
Let’s hope our inbound tourism colleagues continue to benefit from such a speedy tourism stats turnaround in future!
Meanwhile the outpouring of criticism against the regulations continues:
Cullinan Holdings CE Michael Tollman describes the situation as “no-win chaos”, while countries like Kenya and Mauritius reap the benefits of increased tourist arrivals from markets that South Africa is experiencing reduced demand from, like China.
And Gavin Tollman, global Travcorp CEO, in his most recent blogpost says the Government of South Africa has “remarkably and irresponsibly formed new laws, which will deter tourism, with total disregard to their consequence and without dialogue with the industry”. Gavin cites other nations that are investing in tourism and in fact simplifying their visa and immigration regulations to attract tourists. Yes, even security conscious countries like Australia and the USA seem to be able to balance their stringent security requirements with the economic imperatives of growing tourism.
Grant Thornton Report
The Grant Thornton report was released to the press this week in a briefing by the Tourism Business Council of South Africa (TBCSA) and has sparked a plethora of articles about the R4.1bn expected loss to South Africa’s economy as thousands of jobs are lost.
We’re even becoming infamous in the international press. Huffington Post reports that “South Africa’s tourism sector is in crisis” as the new regulations have prompted “dramatic falls in arrivals”, particularly from the world’s largest source of tourists: China. The number of Chinese visitors to South Africa has reportedly plunged 32% since last year.
The reports are also highlighting the concerns and confusion surrounding the “unclear and ambiguous” regulations because there is no specification around which documents are required. To add to the confusion, the Department of Home Affairs has now released a sixth version of its Standard Operating Procedures without highlighting what’s actually changed.
In Social Media, the debate falls largely into two camps: “Tourism and Travel stakeholders are being insensitive and are more interested in their pockets than in the safety of our children” vs “The DHA’s regulations are illogical and will have dire consequences not only on the industry, but also the country’s economy.”
For now, as an outbound travel sector, it is more difficult than it has been for the inbound tourism sector to quantify the actual impact seen in our businesses. We do not have government-issued departure statistics that would clearly define any economic impact.
ASATA will be releasing a survey next week to our members to try and quantify just how significant an effect the requirement for unabridged birth certificates has had on South African families’ appetite to travel. We encourage you all to participate so that we have concrete statistics to define the extent of the issue and to continue our efforts to find a solution that balances South Africa’s need to guard against the scourge of child trafficking with the need to grow tourism and travel’s contribution to the economy.
Join us in our call for #nobirthcerts!
The International Air Transport Association (IATA) announced that it was pausing the rollout of its Cabin OK initiative and beginning a comprehensive reassessment in light of concerns expressed, primarily in North America. This will include further engagement with program participants, the IATA membership, and key stakeholders.
The Cabin OK initiative was launched on 9 June 2015 with the aim of providing passengers with greater assurance that their carry-on bags will travel with them in the aircraft cabin, even when the flight is full. The initiative provides consumers with a voluntary option to use a Cabin OK labeled bag (with optimally sized dimensions of 55 x 35 x 20 cm or 21.5” x 13.5” x 7.5″ inches) that would (1) be immediately recognizable as complying with the vast majority of airline maximum size requirements for cabin baggage and (2) be given a priority (determined by airlines individually) to remain in the cabin on full flights when cabin storage capacity is exceeded.
Interest in the Cabin OK program has been intense. While the value of this initiative has been welcomed by many, including a growing list of airlines expressing interest in the program, there has also been much confusion. In North America particularly, there have been significant concerns raised in the media and by key stakeholders.
“Our focus is on providing travelers with an option that would lead to a simplified and better experience. While many welcomed the Cabin OK initiative, significant concerns were expressed in North America. Cabin OK is a voluntary program for airlines and for consumers. This is clearly an issue that is close to the heart of travelers. We need to get it right. Today we are pausing the rollout and launching a comprehensive reassessment of the Cabin OK program with plans to further engage program participants, the rest of our members, and other key stakeholders,” said Tom Windmuller, Senior Vice President, Airport, Passenger, Cargo and Security.
IATA reiterated some key principles of the Cabin OK initiative which will continue to guide the reassessment: Cabin OK is a guideline for an optimally sized cabin bag, not an industry standard. Cabin OK does not seek to define a maximum size for carry-on bags, which is something each airline does individually. And no consumer will be forced into buying a new bag as a result of this voluntary initiative.
ASATA provides this update on the project’s status in terms of:
- the recovery processes;
- dispute resolution mechanisms,
- contract disputes and the OCPO Governance,
- monitoring & compliance unit and its involvement to assist with recovery at a provincial level.
The Recovery Processes
The National Treasury has followed up with the departments in question in an attempt to resolve the issue of non-payment/late payment. Currently departmental Accounting Officers are responsible for ensuring service providers are paid within the 30-day legislated period. In addition the Treasury is investigating more drastic options of holding Accounting Officers accountable.
Dispute Resolution Mechanisms
The National Treasury and the MAF (through Kitso Consulting) has agreed on a process to be followed with regards to outstanding amount. The agreed process is illustrated below:
- If a business has outstanding amounts owing by Government, the business log the issue with the Industry Association and upload an accurate Age Analysis (split on separate tabs by Province and Department) on a monthly basis
- If a business has experienced ill practice by a Government Official or Department a formal complaint may be logged with your relevant Industry Association
- The Association will extract the Case Log and submit to the dedicated person at Treasury, monthly
- The businesses Age Analysis or official Complaint will be attached to each Case Log submitted
- Treasury will send a Letter with the applicable information for comment by the offending Department
- Treasury will provide feedback to the Industry Association regularly in this regard
- The Department will simultaneously resolve the issue directly with the business concerned
- If no resolution is found the business may request the they meet directly with the offending Department and a Mediation process may begin
- Progress regarding Case Logs will be shared continuously and managed at quarterly meetings between National Treasury and Industry.
- Contract Disputes
All contract payment disputes must be brought to the attention of the Governance, Monitoring & Compliance Unit within the OCPO at the National Treasury which will be resolved as outlined below.
The Governance, Monitoring & Compliance Unit
The Chief Directorate: Governance, Monitoring and Compliance within the OCPO have been co-opted to establish a direct working relationship with Kitso Consulting (ASATA representative) to resolve the backlog on the industry debt.
Regarding the implementation of the travel and accommodation business case/strategy:
Discussions held with various departments as it relates to current tenders on the basis of the approved travel and accommodation business case/strategy. It will further explain the process going forward for implementation of the procurement strategy.
The Chief Directorate: Strategic Procurement and the Industry Member Advisory Forum have, over the last 8 months, done intensive research, engaged with stakeholders and end users, analysed spend patterns, identified challenges, looked at improvement opportunities and developed a sourcing strategy for the category.
To date the National Treasury engaged with forty (40) national departments, seven (7) of the nine (9) provinces and five (5) of the eight (8) metros with regards to the scope of the travel and accommodation business strategy.
The scope of the project discussed was limited to compliance management and to four streams within the travel and accommodation category, i.e. Compliance Management; Travel management companies (Travel agents); Domestic accommodation; Domestic car rental and Domestic air transport.
In terms of implementation and the timelines, the Chief Directorate: Strategic Procurement will engage with the top spending National and Provincial departments to establish a Cross- Functional Sourcing Team (CFST) to deliver the following output:
Improve compliance and address behaviour:
- Draft a National Travel Policy
- Draft a Travel Code of Conduct
- Draft a Travel Do’s and Don’ts information leaflet
- Develop a business case for the implementation of Lodge Cards for travel
Travel management companies (Travel agents)
- National Treasury will not issue a Transversal Contract for Travel Management Companies (TMC’s)
- Departments and Provinces will still be responsible for the appointment of travel management companies (TMC).
- To support the above, the CFST will develop a standard TOR for the appointment of TMC’s that will be in line with the sourcing approaches for the other streams.
- This will include, amongst others, the standard requirements of an online booking tool.
Domestic car rental
- The CFST will develop the specifications for a Car Rental RFB with the view of implementing it as a Transversal / Framework Contract with regional appointment of Service Providers.
Domestic air transport
- The CFST will develop the specifications for a Domestic Air Transport RFB with the view of implementing it as a Transversal / Framework Contract.
- Negotiations may be required with this industry.
- The CFST will develop the user requirements for a web-enabled Government Travel Directory on which all qualified hotel groups, lodges, B&B’s can “advertise” their services. (Similar to any Travel Directory, but with Government established rates.)
- A price benchmarking exercise is to be undertaken to establish the acceptable government rates.
- In this case it will not be necessary for government to put out a RFB or contract with any hotel group or accommodation institutions.
The National Treasury will be going to the market soon to obtain the services of industry experts to assist is some of these activities.
The anticipated timelines are indicated in the table below:
ASATA is disappointed with the decision announced this week by Lufthansa Group that it will be levying a €16 distribution fee on all bookings made through any Global Distribution System (GDS).
The Lufthansa Group, which includes Austrian Airlines, Brussels Airlines, Lufthansa and SWISS, announced that it would be levying a Distribution Cost Charge (DCC) per GDS-generated ticket effective September 1, 2015. The precise exchange rate, it says, will be determined at time of fare filing. See the full press release here.
Travel agents ticketing any of the four Lufthansa Group carriers through the GDS will be affected, while direct bookings through the carriers’ websites will not incur an additional fee. The €16 charge will also not be added to tickets purchased at the airlines’ service centres and airport ticket counters.
Lufthansa Group says it is in the process of developing a new booking method that will enable its “sales partners” to connect to their IT systems directly based on IATA’s NDC (New Distribution Capability) standard although no fixed timeline for this to occur has been given.
Says ASATA CEO Otto De Vries: “We are disappointed the Lufthansa Group was unable to negotiate an acceptable distribution fee with its GDS partners and that they could not find any other mechanisms to absorb their ‘distribution costs’ of €16.
This move is very disappointing because now more than ever, says Otto, because a traveller should be able to rely on neutral and impartial advice of travel agents to find their way through the jungle of airline fares, charges, fuel surcharges and other ancillaries.
“The LH strategy will be another hidden cost passed on to the consumer in the form of an added tax, fee, or surcharge which for the travel agency is considered another Non Commissionable Fee (NCF), and will require you to collect and explain to your client the additional cost that is associated to booking through a GDS. As more items continue to get thrown into this ‘tax’ line it makes fare transparency and comparison shopping more difficult. In fact, there is no comparison shopping possible when the consumer goes on the LH website.
“Passing this cost on to the agent, or forcing them to use an alternate booking platform, could possibly result in our members off-selling the product and would negatively impact on the Group’s position in this market, which relies heavily on agent support.
“ASATA has spoken directly with Dr. Andre Schultz, Lufthansa General Manager South Africa, and will continue to monitor the decision by the Lufthansa Group to keep our members informed. Any comments from industry would be appreciated.”
What the GDSs say:
“Amadeus believes that the traveller is at the heart of the travel industry. Travellers today are looking for consistency, transparency and choice across all channels and we as an industry can deliver that best by connecting and integrating all players.
Lufthansa Group have chosen to go in a different direction by introducing charges that will penalise travellers based on the shopping channel they use. Travellers will either pay more for the same service or, in the case that travel agencies are forced to accept this new commercial strategy by modifying the way they access content just for Lufthansa Group, there will be extra IT costs that may ultimately be passed on to the traveller, putting the travel agent, and/or the end consumer, at a disadvantage.
This new model will make comparison and transparency more difficult because travellers will now be forced to go to multiple channels to search for the best fares. Ultimately, the industry overall stands to lose from this distribution model.
As always, Amadeus remains open to working with all its partners and customers to serve the best interests of the traveller and the industry.”
“We stand ready to work with airlines globally that wish to sell and retail their products through Sabre. Lufthansa’s proposed ‘cost distribution charge’ disadvantages consumers and travel agencies. The GDS is the most preferred and efficient channel for consumers and travel agents to shop, book and manage travel, and provides consumers with transparency, choice and the ability to comparison shop. We stand behind the significant value we provide airline customers and agencies around the world, and we expect to find a mutually beneficial solution for both Lufthansa and our agency customers.”
“We believe this proposed surcharge is not in the interests of either the end-traveller or the airline group. Meanwhile, Travelport-connected agents worldwide can still book the full, published content from all of the Lufthansa Group airlines (Lufthansa, Swiss, Austrian Airlines and Brussels Airlines) with no surcharges.
We continue to remain focused on providing our travel agency customers worldwide with the broadest possible travel content and providing our airline partners with cost-efficient and highly effective global distribution. Many of our airline partners, including the Lufthansa Group, are now also taking advantage of our suite of industry-leading merchandising solutions. These solutions allow airlines to connect to us and display and retail all of their content, including their ancillary content, in a flexible way that meets their business needs.”