Supply chain challenges in the global travel industry
As the world has slowly moved out of and back into Covid restrictions this has understandably put enormous pressure on the supply chain across the...
Supply chain challenges in the global industry
The impact of the pandemic on the supply chain
As the world has slowly moved out of and back into Covid restrictions this has understandably put enormous pressure on the supply chain across the entire end to end travel buying process.
Long established travel businesses have gone bust and not been replaced and many travel industry staff that were furloughed have not returned to their previous roles in the travel industry, taking many years experience with them.
The pent up demand for UK leisure travel released in the summer after the partial removal of restrictions put a tremendous amount of pressure on hotels in particular. Having been closed for many months, losing staff and trying to re-recruit in a volatile employment market with rising wages and utility cost inflation meant supply chains were not in place to welcome travellers at such short notice.
The constant changing of rules and regulations due to Brexit, Covid and border closures has forced many clients to move from online (self-booking) to offline enquiries, significantly increasing booking time.
These factors and more have all combined to make the whole travel booking process considerably more complex and time consuming for both clients and TMCs.
Hotels have suffered more than most over the last two years. Although many were closed and only a few remained open for key workers, every hotel had fixed costs to pay and also had to keep a core team running the properties for maintenance, health & safety and fire regulations.
In a people intensive industry, hotels lost human resources in all areas and onsite staff were struggling to replace lost staff and maintain any sort of revenue stream in a very slow market. This has resulted directly in customer service levels suffering and reduced offerings from hotels such as continental breakfasts, 24 hour room service removal, early closing of food and beverage outlets and reduced laundry services to on-request for stays of more than one night.
ATPI has been working closely with hotel chains to help improve processes and times for Group pricing requests. In particular, reviewing current SLAs in place, which are unable to be met due to increased transactions and low levels of untrained staff to manage often complex requests, such as quarantine and production groups. This is coupled with an exceptionally high level of cancellations and postponements.
We do not foresee any changes in this unfortunate situation following the latest round of restrictions until confidence is restored in the ability to travel and meet freely without restrictions.
Impact on the aviation industry
The airline industry has really suffered globally, resulting in reduced schedules, fewer aircraft in the fleet and a lot less staff working for the airline.
The main issue facing ATPI initially was refund processing. The airlines have a mechanism where we can claim refunds through our booking systems. However, once lockdown came they closed this mechanism down and it meant we had to process thousands of refunds manually.
Thankfully, due to Government loans to airlines, they slowly reverted back to the automated processes. Some are still manual but the main airlines are now back
to auto-refunding, this should make a smoother process. In addition, the airlines have a much better flexibility process if you would prefer to change the date of travel, rather than apply for a refund.
Other areas of operation can be slow for ATPI due to the much reduced staff numbers especially as most of our airline support functions are based overseas or in their head offices. We have also had a big change in our UK airline account management and so some functions are slower than pre-Covid. Thankfully since October when furlough ended the response from the airlines has been much quicker and attentive.
Impact on the car rental industry
Operationally car rental has been the biggest challenge to ATPI in servicing our clients.
The main issue is a shortage of cars. Due to a factory being destroyed in a fire there is a shortage of semi-conductors, which all new cars need. This global shortage of semi-conductors has created a supply issue in the new vehicle market. This means that rental suppliers are looking at lead times as long as 15 months for new vehicles; particularly vans, 4X4’s and HGV’s.
There are also shortages of parts due to COVID and Brexit, which can increase repair timescales, further impacting vehicle availability.
COVID restrictions remain in place which increases average vehicle cleaning turnaround times due to the need for social distancing and increased cleaning protocols. One way rentals move cars from one location to another and do not return back to key locations like Aberdeen which creates a shortage of vehicles with crew changes.
Supply is an issue and car rental companies are trying to keep cars for longer, meaning you will see higher mileage vehicles than normal.
To help your car rental booking we recommend the following:
- Book in as far in advance as possible ideally at least 48 working hours ahead of the rental.
- Keep the car for as long as possible. If someone is renting for two days and then another two days later in the week we recommend keeping the car for the whole duration.
- Join Car Rental frequent renter schemes like AVIS Preferred and Hertz Gold. When the car rental companies have supply issues at a branch they normally protect these renters first.
- Try an alternative transport means for a one way rental. Trains offer a greener option to cars and schedules are nearly back to normal. The rental companies do not like losing a car to another part of the country for a one way rental especially in Aberdeen as the car will not come back. They may decline these rentals due to this.
There have been supply issues where cars have not been available for a confirmed rental for a lot of the above reasons. Not to supply the car for a confirmed reservation has happened on occasion during recent months. This is due to the car rental company making a decision on the day where they do not have an available car. ATPI do work closely with all car rental companies to try and make sure that this does not happen but due to the above issues within the car rental sector we strongly advise you to follow our recommendations.
Whilst we have clearly highlighted some of the challenges affecting the whole travel industry we are gradually seeing improvements in services and availability of products in some, but not all areas and expect this fluid situation to last well into 2022 and possibly into 2023.
ATPI staff are working on joint supplier initiatives, new technical processes to try and improve the customer booking experience.
