Tough times ahead as travel agents adopt no-credit policy

Wednesday, June 17th, 2020 16:27 |
Coronavirus test samples.

Kenya’s travel agents have resolved to stop issuing credit facilities to their clients to sustain businesses in this time of crisis.

The radical decision, arrived at by lobby group, Kenya Association of Travel Agents (KATA) was informed by the losses incurred as a result of Covid-19 pandemic, which they say has greatly affected their cash-flow positions. 

Expected to be affected are corporates, government agencies, non-governmental organisations and traders who book for travel and pay over an extended period of time.

The policy will ensure that travel agents deal with cash paying clients, and therefore are able to remain operational in times of crisis as seen with the Covid-19 pandemic.  

“Travel post-pandemic needs to be on cash basis. Kata is working with TRA on setting up frameworks that will see travel agents paid on cash basis,” said Kata Board of Directors Treasurer Joseph Kithitu.

New normal

Kithitu said with no credit extended to travel agents, the new move would enable KATA members to align their businesses to deal with the new normal.

“We may not push as many volumes as before, but we will be able to remain operational even through such crisis,” he said. 

He said travel agents had undergone a traumatic period in the four months to June since the government instituted partial lockdown that restricted local and international travel as a way of mitigating the spread of the virus.

Many businesses, he added, have closed down and laid off staff because of nil bookings.

“All we can do now is chase after payment from government, corporates and our other clients,” he said, adding that  business had been hit harder as airlines were not refunding travel agents for travel that was already booked during the coronavirus period.

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