Mark Warner bumping up ski holiday cost after booking

A snowHead

Well this is really annoying!! I've got two Mark Warner trips booked this season, and I've just had this letter.

I don't want to have to pay potentially an extra £100 for something I've already booked at an agreed price, but I presume there's nothing I can do except cancel or suck it up Mad

A snowHead

@HoneyBunny, yep...if it is in the T&Cs then thats what you agreed to

Well, the person's real but it's just a made up name, see?

Take your hard earned elsewhere next time, Euro is dropping in value at present, have you an option to cancel or will that mean cancellation charges? Not a good business move by MW, should've sucked it up (profit cut or even small loss) for those that had the foresight to book early and be loyal customers and pay MW early....imo Shocked

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A quick squiz at the T&Cs shows you're actually pretty screwed - cancel and you'll lose your deposit because the surcharge is less than 10% of the total value of the trip... PERHAPS Dear ol MW shouldn't have pegged their exchange rate 4 years ago.

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I have been hit with this as well. Yes, it is in the terms and conditions, but they shouldn't underestimate the damage that something like this does to goodwill. For fully booked and paid customers it is difficult to swallow as the value of the Euro was known in September when the pricing was set. The current euro rate is 117 against 123 mentioned above, a difference of 5%. It feels like the surcharge is being used to subsidise discounts and incentives as a result of a quiet market.

I have trips booked with two other tour operators and neither has had to impose and price increases. Or at least not yet.

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And if the exchange rate improves, will Mark Warner be giving their paid up customers a rebate??

After all it is free

That is not good, and will certainly out me off going with MW again. Thanks at least for the heads up.

Hang on folks - these are thin margin businesses. If they didn't put these clauses in they would have to charge more to cover the risk or hedging cost. It's like fuel surcharges on airlines - they can't control the oil price or the exchange rate and they don't have fat margins.

@Richard_Sideways,
Have to say it is weird that they used a 2012 rate to price their 2016/17 holidays but if you look at the exchange rate chart it would have been an even bigger problem if they'd used the October 2015 rate when it was about 1.36!

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I have just checked the Esprit T&C's they have the same clause but haven't (yet!) exercised the option. Now it is possible now that one has the others will try and follow suit, however of they don't it is as far as I am concerned a huge black mark on MW.

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It's a bit galling - Suggest maybe a Twitter and/or FB post may yield more results than dear old SH.

lots of companies are now using brexit as an excuse to get more money out of us, now is a good time to see what companies are in it to provide a good customer service, and those that are in it just for the money, mark warner have clearly showed what corner they are in

You know it makes sense.

Read the t&cs - a lot of TOs buy currency forward so their customers are not at risk of such surcharges as they know that damages goodwill. I have never travelled Mark Warner and this I a suitable warning not to look to do so as strange as it may seem fluctuations of exchange rates have been around ever since we left various fixed rate systems.

Otherwise you'll just go on seeing the one name:

A snowHead

Surely the Directors at MW understand the damage this could do to their reputation. With tight margins, I can only assume it was deeded necessary to support the on-going business and not to squeeze money out of customers.

I personally dislike some of Thomson's fees and have not booked a family holiday with them for some time.

A snowHead

That's not so nice of MW, and will cost them a few customers no doubt.
I would have thought any TO would need to be a bit more customer centric in this day and age of the easy diy alternative.

Well, the person's real but it's just a made up name, see?

Massive PR own goal isn't it?!

They could have just slightly increased future prices in order to recoup the shortfall and most people would have just accepted it.

Instead they've decided to get the money from people who have already booked - and thoroughly pi55ed them off in the process.

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A well run TO would cover themselves against short term (ie over a season) future currency fluctuations by buying forward. When they would do that would depend to some extent on their business model (ie whether they were taking commitment for the season or not), but if I understand their model they should have bought forward at the time they committed to hotels etc (and all related Euro costs such as food etc) and they printed their brochure with prices in it. If they had done that then they would not be impacted by these changes in this season. Its not a perfect science but it ain't rocket science either. By not buying forward they are speculating. That is what banks do, not responsible TO's who take customer money months ahead of providing a service.

Either they are not well run or they are charging these supplements to cover discounts this season (because the effect of the Euro has dampened bookings - and that is not the purpose of the currency movement clause) and future bookings on future seasons (when they will have to increase prices).

I understand the reason for the clause in the contract - a well run company would always include it to cover the genuinely unexpected - but I am unclear why they have felt the need to invoke it. They deserve this to be a PR disaster and feel sorry for people like the OP who are left in a no win situation.

After all it is free

Stick a fork in them - they're done 😌

I don't think they would have done this lightly. Competition is pretty tough and without the increase they may have had bigger difficulties.

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@HoneyBunny, Make a point of not using their bar in the hotel and make it well known why you are doing it.

On a personal note I can already hear the more vociferous MW guests having a pop at the Manager as they pull up below my balcony wink

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I understand that this may gall folk who have booked with them but hands up those who predicted the Brexit result correctly then and could have planned all this presumably when brochures were sent to printers many, many months ago before the Euro vote?

I really think MW would have though very long and hard about doing this. The extreme alternate I guess would be costs increase, they go bust and you have no holiday.

I know some of my customers have canned plenty of projects and cut back in lots of areas due to Brexit, no surprise that is affecting ski holidays.

They have absorbed 2% and kept it below the 8% it appears that they could have increased it by.

I have no links to MW at all, I hardly ever use TOs for ski holidays but I guess they really are between a rock and a hard place on this one.

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I dislike companies using the exchange rate to increase prices after one has paid. It's not as if they will give you a refund if and when the £ become stronger after you have booked.

@chrisb, I think I probably agree with you but that isn't my point. My point is that they could and should have avoided it by hedging. They have taken the view that currency would remain the same or weaken against sterling and that they would , at worst, make the profit they expected. If sterling gets stronger they make more. They got it wrong. To have to do this probably really badly wrong. That is not responsible behavior when you sit on significant amounts of your customers' money.

ps in the event sterling had appreciated 20% vs the Euro do you think they would currently be offering refunds?

You know it makes sense.

Mark Warner charge a prestige chalet company price for a pretty standard product. Also limited flight options. Have put me off using Snoworks in the past as they use them for the accommodation option (I know you can use other hotels etc).

Otherwise you'll just go on seeing the one name:

If you were to find an operator who paid to hedge the risk, they would presumably have a higher basic fee to reflect that additional cost. I'd guess that any "hedging" is done by buying high-cost items (flights? accommodation?) in advance, but that only works if they're liquid enough to be able to stash funds in the destination currency for some time - none of this is cost free. I guess they do make profit on the "custody" of punters funds, but that's not huge with low inflation. Historically many tour companies have had problems managing that mix of cash flow and currency.

The approach described makes business sense because you can lay off the penalty on the customers when it goes bad, but keep the profits when it goes well.

If the tour company "sucked up" the consequence of voters' actions and consequently ceased trading, any compensation would be in pounds, so you'd still be short the 20% we've all paid so far for leaving the market. For what it's worth I'd be surprised if some tour companies did not go under as a result of the currency devaluation.

A snowHead

@stevios, Very few businesses hedge their currency exposure 100%. It's simply too expensive. At points there has been a 20% drop in the pound vs the euro and the cost of hedging all of that would have extortionate and everyone would grumble if MW's holidays had increased dramatically in price even if the pound hadn't dropped (or possibly risen). Suely it makes sense for all concerned to set a sensible price, hedge to a reasonable degree, absorb what you can beyond that, and then if unavoidable pass on some of the extra?

In addition, you can't just look at the date on which HoneyBunny booked her trip and the date at which they asked for a supplement, or even the date on which she takes her trip. These are not necessarily the dates that are relevant to MW's cost base or their hedging dates.

A snowHead

Adding a surcharge used to really common back when I first started doing package holidays (early 80s). Think back then they blamed it on fuel prices as well as exchange rates. It's been a while since I last saw this happening and it's sad to see it back but I guess we better get used to it.
I'm doing a DIY trip this year and have calculated my costs to have increased by around £200pp since the fall in exchange rates since I booked so your charge seems about right.

Well, the person's real but it's just a made up name, see?

It is on the Esprit website that they will not increase prices after booking - in the Q&A on the EU referendum bit on their blog. So other tour operators may not be following suit.

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@stevios, You should lend Mr Warner your 20-20 binoculars.

Back to even a few days before the Brexit vote, the pollsters and bookies were predicting a Remain vote. Had that happened, the pound would have likely increased to above the 1.42 rate it was at when the referendum was called. In the light of these facts, any company spending tens of thousands to commit to buying millions of Euros at less than 1.42 would have been irresponsible.

I am hundreds of thousands down on building materials I am buying from Denmark. I could have hedged but the sensible option was not to do so. Unlike MW, I have no where to go to recover the losses. The losses are a small percentage of our turnover as the majority of our business is not affected by exchange rates. We will absorb the losses, but given the chance I would charge our clients the extra cost. If I did so and gave good service, our clients would be back for more next year.

People will recognise that MW are in exactly the same position, but the travel industry doesn't have the margins my company do. They have to recover such unexpected losses and that is why it is in their T&Cs. They will make sure those people enjoy their holidays and their customers will be back... to a company that survived the episode.

Make no mistake, many companies will not survive this.

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I suppose much of it boils down to a simple choice for companies; either I offer customers the lowest price I can and then pass on (some of) the price/currency increase if it happens, or else I price it all in at the start making a normal margin if the worst happens but a huge margin if nothing bad happens, or a middle ground option. Personally, I'd probably rather go with the first option.

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I live on the border with ROI and when when I ordered a substantial value in various goods, that were priced in a different currency, the companies involved always locked in the exchange rate on that day, as it took the currency gamble out of the equation.

Over the last couple of years, I've seen TOs milk the exchange rate, if buying lift passes/ski hire in sterling, when booking the holiday...and since I have the option of going from Dublin and keeping the holiday entirely in Euros, I have seen a TO taking about 60 GBP pp through the exchange rate, if going from UK.

And one thing for sure, as said above, if the currency goes in their favour, there certainly won't be any refunds.

Personally I think once a holiday is booked and fully paid for, the price should not change..though prices should go up quickly and by enough for subsequent hols, to reflect the change.

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They made a judgement and got it wrong, for whatever reason. No reason why you should pay for their risk-taking or poor management. Brexit was always a possibility and subsequent drop in Sterling was actually not as bad as predicted. They could have coped using standard practices. and most of the accommodation, transportation etc will have been contracted way in advance and fixed. We had a similar hit from Crystal a few years ago due to 'fuel price rises' where they actually went down the checkin line at the airport and told us the airline wouldn't fly us without paying a surcharge. It was a complete lie - the airline denied it. These are all mechanisms whereby the TO takes a risk but you pay if they lose the bet. I've never travelled with Crystal since and in fact, a couple of years later we moved to organising our own holidays because of TO incompetence. I'm not saying all TOs are incompetent or dishonest, just that you always seem to get some bright management type taking a risk and then making the customer pay.

After all it is free

Out of interest, is there anything stopping a company like MW pricing and charging their holidays in Euro rather than pounds, and so avoiding most of this exposure to currency fluctuations? Would it put you off booking if you had to pay in Euro?

Every company I've been involved with that trades across currency zones at a >£25m level hedges their exposure so as to minimize risk.

Hopefully the MW FD will be on here soon to explain the company's position and respond to our questions Smile

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I suspect that the crux of the matter is that they had 2 options:

1) Add the additional charge and people have to stump up.
2) Go bust and no one gets a holiday.

Not saying either one of those is right though.

Help!!

Mark Warner bumping up ski holiday cost after booking

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