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Hirers beware


Rooffy

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18 hours ago, nicknorman said:

The problem is that these companies (with a few exceptions like Ryanair and BA) don’t have enough funds to refund everyone.

 

So there are 2 scenarios,

1: they refund as many people as they can until they go bust, those not refunded by the time the company goes bust -tough.

2. they offer vouchers, rebooking etc etc and eventually, everyone that booked gets a holiday, flight or whatever. Well, those that haven’t died in the meantime anyway.

Martin Lewis is right, but equally you can’t get blood out of a stone as they say!

I suspect the cash has been used but it does rather raise the question (to me anyway) of why they might be using deposits to help with the daily cash flow. My view is that a deposit is a show of faith by the purchaser and should be ring-fenced until the holiday takes place. I accept it might be used to cover "admin costs" should the purchaser cancel but outside of that it should be protected and refundable.

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1 minute ago, Traveller said:

I suspect the cash has been used but it does rather raise the question (to me anyway) of why they might be using deposits to help with the daily cash flow. My view is that a deposit is a show of faith by the purchaser and should be ring-fenced until the holiday takes place. I accept it might be used to cover "admin costs" should the purchaser cancel but outside of that it should be protected and refundable.

Depends on the business. In many cases the costs of providing the service (holiday) are actually incurred before the start of the holiday. In one sense, the cash flow is funding the provision of the holiday. In sectors that are very price sensitive then the alternative of not using the liquidity would be extra borrowing/investment that would add to the cost of the holiday.

 

One of the possible outcomes of this pandemic will be a re-awakening of the risk assessment trade-off - infrequent risks with high costs do sometimes happen. We have all 'benefited' - and the electorate has endorsed - the reduced cost of public service (via lower taxes) and are now finding out about the high cost of that choice.

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1 minute ago, Mike Todd said:

Depends on the business. In many cases the costs of providing the service (holiday) are actually incurred before the start of the holiday. In one sense, the cash flow is funding the provision of the holiday. In sectors that are very price sensitive then the alternative of not using the liquidity would be extra borrowing/investment that would add to the cost of the holiday.

 

One of the possible outcomes of this pandemic will be a re-awakening of the risk assessment trade-off - infrequent risks with high costs do sometimes happen. We have all 'benefited' - and the electorate has endorsed - the reduced cost of public service (via lower taxes) and are now finding out about the high cost of that choice.

Fair point but is this the case the re a narrowboat holiday for instance? I wonder what the books of these companies really look like, they must effectively be bust - trading on the income earned from something that has not yet happened and might not happen (through no fault of the purchaser) is hardly sound business practice. But I agree - we have all wanted something for as close to nothing as possible and have not seen the risks attached to that. Maybe audit practices need looking at too.

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18 minutes ago, Traveller said:

Fair point but is this the case the re a narrowboat holiday for instance? I wonder what the books of these companies really look like, they must effectively be bust - trading on the income earned from something that has not yet happened and might not happen (through no fault of the purchaser) is hardly sound business practice. But I agree - we have all wanted something for as close to nothing as possible and have not seen the risks attached to that. Maybe audit practices need looking at too.

The obvious answer to your first question is because they have to finance the purchase/build of a fleet of boats. I suspect a hire company will have spent way more than the combined deposit of every single holiday they can sell in a year simply to be able to offer customers the chance to hire in the first place.

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11 minutes ago, Captain Pegg said:

The obvious answer to your first question is because they have to finance the purchase/build of a fleet of boats. I suspect a hire company will have spent way more than the combined deposit of every single holiday they can sell in a year simply to be able to offer customers the chance to hire in the first place.

Building a fleet of boats on the back of customer deposits has the potential to equate to selling holidays on boats that do not exist. In any event is not a deposit paid to hire a specific boat as per brochure! Yet another reason deposits can be lost then - holiday booked, not enough deposits taken and boats not built. I very much doubt if that is the way most firms work and some of those fleets have been around for years anyway. I can believe that some get into difficulty and cannot service their bank loans and therefore use the deposits.

Edited by Traveller
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47 minutes ago, Traveller said:

My view is that a deposit is a show of faith by the purchaser and should be ring-fenced until the holiday takes place. I accept it might be used to cover "admin costs" should the purchaser cancel but outside of that it should be protected and refundable.

Yes that would be nice, but unfortunately the world doesn’t work like that at the moment.

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It does exist in some heavily regulated businesses but clearly not the holiday industry. So clearly the holiday industry, like some others, needs sorting out or at least in needs a regulator with teeth. It is ok saying deposits will be paid back (subject to certain exceptions) but if there is no mechanism to ensure that deposit is there the entire thing is a charade.

 

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7 minutes ago, Traveller said:

Building a fleet of boats on the back of customer deposits has the potential to equate to selling holidays on boats that do not exist. In any event is not a deposit paid to hire a specific boat as per brochure! Yet another reason deposits can be lost then - holiday booked, not enough deposits taken and boats not built. I very much doubt if that is the way most firms work and some of those fleets have been around for years anyway. I can believe that some get into difficulty and cannot service their bank loans and therefore use the deposits.

I’m not with you. My point was they need to spend before they can offer a sale. You made it sound like they have no costs until the day of the holiday.

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No what I am saying they should not be using cash taken as a deposit for a future holiday to finance current operations/past debts. Thus said cash should be there should a refund event arise - like the holiday is cancelled due to no fault of the purchaser. 

Edited by Traveller
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14 minutes ago, Traveller said:

No what I am saying they should not be using cash taken as a deposit for a future holiday to finance current operations/past debts. Thus said cash should be there should a refund event arise - like the holiday is cancelled due to no fault of the purchaser. 

Yes that could happen /  could be made to happen, but the consequence would be that the hire companies had to have loads of cash sitting around in bank accounts (earning no money due to crap business interest rates) and would have to fund thei boat building and running costs from past profits. In other words, holidays up to now would have been more expensive.

 

So the question is, does everyone want to have paid more for their boat or other holidays for past years so that under highly unlikely, exceptional and (hopefully) one-off global circumstances, they are guaranteed their money back? I suspect if you’d asked everyone last year, the answer would have been no.

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1 minute ago, nicknorman said:

So the question is, does everyone want to have paid more for their boat or other holidays for past years so that under highly unlikely, exceptional and (hopefully) one-off global circumstances, they are guaranteed their money back? I suspect if you’d asked everyone last year, the answer would have been no.

 

The firms would be more likely to borrow the funds from the bank than keep separate capital tied up, so we are probably talking about a quarter to a third more expensive for the hire to pay finance charges.

 

Your £1000 for the week would be more like £1300.

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ABC Leisure, when it was simply Alvechurch Boat Centre, had their fleet 'sponsored' by others and I think that is still common practice throughout the business.  Nowt wrong with this and the 'owner' gets to use the boat each year, has a cut of the profit on use and then retains the boat when the fleet life is ended.  Similar to some very expensive sea going yachts I believe.  They are also getting a 25% reduction in CRT licence for 3 months so I don't feel sorry for them one bit and they should refund where the contract states so.

 

I looked at a short break hire on the Mon & Brec [in lieu of chopping 20ft off my own boat]and it would cost £900 for 4 days in the autumn!   It's no wonder shared ownership took off.

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9 minutes ago, TheBiscuits said:

 

The firms would be more likely to borrow the funds from the bank than keep separate capital tied up, so we are probably talking about a quarter to a third more expensive for the hire to pay finance charges.

 

Your £1000 for the week would be more like £1300.

Personally, I would prefer to pay a "proper" rate but of course that might force the hirers out of business because there is a high probability a lot of punters would not be prepared to pay. But, if that is how it is the risks should be clearly marked on the contract. I wonder how many would buy a holiday if the terms were basically - your deposit has been paid into the business and is non-refundable.

 

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2 hours ago, Traveller said:

Personally, I would prefer to pay a "proper" rate but of course that might force the hirers out of business because there is a high probability a lot of punters would not be prepared to pay. But, if that is how it is the risks should be clearly marked on the contract. I wonder how many would buy a holiday if the terms were basically - your deposit has been paid into the business and is non-refundable.

 

But what is the point of a deposit if you can just ask for it back? When you book something (which precludes someone else from booking the same thing) surely the point is that, if you decide to back out at the last minute, the operator, who probably can’t now offer the service to someone else at short notice, gets to keep the deposit by way of recompense.

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The pandemic is an exceptional circumstance, it's not like the customer just changed their mind.

 

This might help? The government told businesses like holiday companies that they have to give refunds if COVID has prevented people from accessing things like holidays. Some holiday companies initially offered only deferment but the government have basically said that's not good enough. 

Look up Martin Lewis for more details on this. He talked about it on his tele show recently.

https://www.mirror.co.uk/money/martin-lewis-issues-crucial-warning-21955025

Edited by BlueStringPudding
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2 hours ago, rustynewbery said:

ABC Leisure, when it was simply Alvechurch Boat Centre, had their fleet 'sponsored' by others and I think that is still common practice throughout the business.  Nowt wrong with this and the 'owner' gets to use the boat each year, has a cut of the profit on use and then retains the boat when the fleet life is ended.  Similar to some very expensive sea going yachts I believe.  They are also getting a 25% reduction in CRT licence for 3 months so I don't feel sorry for them one bit and they should refund where the contract states so.

 

I looked at a short break hire on the Mon & Brec [in lieu of chopping 20ft off my own boat]and it would cost £900 for 4 days in the autumn!   It's no wonder shared ownership took off.

 They may be getting 3 free months, but that ain't as cash.  This year's licences were mainly paid for in March/April, in cash, in most cases  out of the deposits folk have made.   Effectively, the CRT free period starts next March/April and is not much help when there are staff to pay now,  boats to look after and, ofttimes, loans to pay back.

The gubbinsment may say they have to refund, but if there is no cash left in the business refunds are impossible and Queer St beckons.

 

N

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25 minutes ago, BEngo said:

 They may be getting 3 free months, but that ain't as cash.  This year's licences were mainly paid for in March/April, in cash, in most cases  out of the deposits folk have made.   Effectively, the CRT free period starts next March/April and is not much help when there are staff to pay now,  boats to look after and, ofttimes, loans to pay back.

The gubbinsment may say they have to refund, but if there is no cash left in the business refunds are impossible and Queer St beckons.

 

N

Good post.

 

I do find it odd that a boat owner would have no sympathy for a canal business, irrespective of the rights and wrongs of deposits and refunds. They must all be under considerable pressure and both owners and employees will be worried about their futures.

 

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1 hour ago, nicknorman said:

But what is the point of a deposit if you can just ask for it back? When you book something (which precludes someone else from booking the same thing) surely the point is that, if you decide to back out at the last minute, the operator, who probably can’t now offer the service to someone else at short notice, gets to keep the deposit by way of recompense.

The point is a company paying it back when they cancel or cannot deliver the product for reasons not of the customer’s making.

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4 hours ago, rustynewbery said:

ABC Leisure, when it was simply Alvechurch Boat Centre, had their fleet 'sponsored' by others and I think that is still common practice throughout the business.  Nowt wrong with this and the 'owner' gets to use the boat each year, has a cut of the profit on use and then retains the boat when the fleet life is ended.  Similar to some very expensive sea going yachts I believe.  They are also getting a 25% reduction in CRT licence for 3 months so I don't feel sorry for them one bit and they should refund where the contract states so.

 

I looked at a short break hire on the Mon & Brec [in lieu of chopping 20ft off my own boat]and it would cost £900 for 4 days in the autumn!   It's no wonder shared ownership took off.

But the Contract says that if YOU cancel you are entitled to nothing back, which is exactly what the OP did. If he had waited a short time for the company to cancel he would have got all his money back.
As it is the company have gone beyond their Contract with the OP and offered him a voucher for a future holiday.

1 hour ago, BlueStringPudding said:

The pandemic is an exceptional circumstance, it's not like the customer just changed their mind.

 

This might help? The government told businesses like holiday companies that they have to give refunds if COVID has prevented people from accessing things like holidays. Some holiday companies initially offered only deferment but the government have basically said that's not good enough. 

Look up Martin Lewis for more details on this. He talked about it on his tele show recently.

https://www.mirror.co.uk/money/martin-lewis-issues-crucial-warning-21955025

But that does not apply if it is the customer that cancels, especially if they haven't discussed it with the hire company first.

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10 minutes ago, Traveller said:

The point is a company paying it back when they cancel or cannot deliver the product for reasons not of the customer’s making.

If the COMPANY cancel then they will repay the deposit. If the customer cancels, as in this case, they do not have to.

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1 minute ago, Graham Davis said:

But the Contract says that if YOU cancel you are entitled to nothing back, which is exactly what the OP did. If he had waited a short time for the company to cancel he would have got all his money back.
As it is the company have gone beyond their Contract with the OP and offered him a voucher for a future holiday.

This is all apparently just a timing thing then and leaves a bad taste. But some companies are not refunding when they instigated the cancellation. 
 

2 minutes ago, Graham Davis said:

If the COMPANY cancel then they will repay the deposit. If the customer cancels, as in this case, they do not have to.

Tell that to the airlines. 

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54 minutes ago, Traveller said:

The point is a company paying it back when they cancel or cannot deliver the product for reasons not of the customer’s making.

Well ok, but let’s remember that In this case, they cannot deliver the product for reasons not of their making either. I draw a similarity with the EU airline laws - the airline is only required to pay for a delayed flight if the delay was caused by something under their control.

44 minutes ago, Traveller said:

This is all apparently just a timing thing then and leaves a bad taste. But some companies are not refunding when they instigated the cancellation. 
 

Tell that to the airlines. 

But the reality is that in most cases, neither the customer nor the business cancelled delivery of the product. It was the uk government that did that.

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Should just have deferred til next year. If everyone is alive and well, next years (annual) trip is paid for.

Forget the money aspect. Money was always spent. It;s memories that could have been made that are lost.  Thats noones fault.

 

We were due to be on a boat today with anglowelsh.  I knew it wasnt going to happen.

i waited, they called, i rebooked. Next years trip sorted.

 

 

 

Edited by kawaton
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3 minutes ago, nicknorman said:

Well ok, but let’s remember that In this case, they cannot deliver the product for reasons not of their making either. I draw a similarity with the EU airline laws - the airline is only required to pay for a delayed flight if the delay was caused by something under their control.

But the reality is that in most cases, neither the customer nor the business cancelled delivery of the product. It was the uk government that did that.

Yes but at the end of the day they have not delivered and therefore the deposit monies should still be available for return. Even if less an admin charge given the circumstances. That is why I believe deposit monies should be ring fenced. 
 

 

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11 hours ago, Traveller said:

Yes but at the end of the day they have not delivered and therefore the deposit monies should still be available for return. Even if less an admin charge given the circumstances. That is why I believe deposit monies should be ring fenced. 
 

 

No.

I'm this case the customer cancelled BEFORE the company were unable to fulfil their side of the contract, therefore the customer is at fault, and the deposit is not refundable. It doesn't matter if deposit money is ringfenced or not.

 

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