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Mark Warner bumping up ski holiday cost after booking

 Poster: A snowHead
Poster: A snowHead
companies are now just using brexit as an excuse to cut jobs and raise prices, for years they have been trying to justify their actions, brexit must have been a message from heaven for some of them
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 Obviously A snowHead isn't a real person
Obviously A snowHead isn't a real person
If MW do this and other ski holiday operators don't then customers will be both annoyed at feeling ripped off and lose confidence for the future as they'll believe MW are close to going under so a risky purchase.
Outlook for MW is not sunny. Embarassed
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 Well, the person's real but it's just a made up name, see?
Well, the person's real but it's just a made up name, see?
That's a bit boring, let's not forget stranding customers in the Alps, if schoolkids then even more fun Madeye-Smiley
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compostcorner wrote:
companies are now just using brexit as an excuse to cut jobs and raise prices, for years they have been trying to justify their actions, brexit must have been a message from heaven for some of them

I'd have thought it's the opposite: if your input costs go up 20%, then your profit margins suffer. But then I suppose I'm an "expert", so I'm sure you're right in some daily mail sense.
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chocksaway wrote:
@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


I find it quite tough not using bars, but I think in this instance you're right.

I'll be getting through as much of their "free" wine as I can neck, that's for sure.

Wouldn't like to be working for MW customer services right now.
ski holidays
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SnoodyMcFlude wrote:
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.


This.

We have a 2-week MW holiday booked so have received the e-mail

The exchange rate hit is a real loss for the holiday companies, the opposite side of the coin to the exchange rate crash saving thousands of UK steel jobs this week

Anyone booking a MW holiday can probably afford the hit. poo-poo happens, don't cry just get on with it and enjoy your skiing holidays
ski holidays
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Then you can post your own questions or snow reports...
SnoodyMcFlude wrote:
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.


I'd fear that this is the case. If it was something they could have sucked up likely they would rather than have people badmouth them all over. Still memories are short with TOs.
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 After all it is free Go on u know u want to!
After all it is free Go on u know u want to!
This is really annoying when it happens but the past year has been a real oddity for currency. As others have sort of for the price of a few beers you have the security of them not going bust and getting no holiday at all. Probably a drop in the ocean to most MW clients.

The being said, Kuoni did the fuel surcharge dirty trick on us many years ago and we never considered using them again.
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Quote:

I'd have thought it's the opposite: if your input costs go up 20%, then your profit margins suffer. But then I suppose I'm an "expert", so I'm sure you're right in some daily mail sense.

Very Happy
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@red 27,
Quote:

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



They did manage their risk - with that clause in the T&C.
That's just as common an approach to risk management as hedging - you pass the risk to someone who can better afford to take it (the afford bit is about the thickness of margins). For example suppliers of electrical equipment would generally have a copper pass through clause to their customer rather than take financial hedges on copper because it is more efficient (cheaper) for the whole chain.
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I'm really not sure what people expect. We rightly demand that TO's comply unfalteringly with the T&C's and yet we somehow think it's unreasonable when they ask us to do the same. I've even seen comments elsewhere that these surcharges are particularly unfair because travellers will face higher costs in resort so money is even shorter than ever. Some other comments suggest it's unfair because 'We've worked hard for this money'. So, you've worked hard for the money and should therefore be indemnified from the higher costs, while the TO's obviously don't work hard for the money and should therefore carry the cost?
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And love to help out and answer questions and of course, read each other's snow reports.
^ but as far as I can tell, MW are the only holiday firm doing this? They were offering loads of cut price deals over Christmas and New Year, so is that what we're now paying for?

I won't be using them again as I now don't trust them not to increase my holiday price, and I'm also concerned they might go bust.

Posidrive wrote:
Probably a drop in the ocean to most MW clients.


I wish!
ski holidays
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I suspect a company only making £1.5m EBITDA on £42m turnover has little choice but to pass on unexpected costs
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 You know it makes sense.
You know it makes sense.
Package Travel Regulations in plain english: http://www.which.co.uk/consumer-rights/advice/my-package-holiday-has-been-changed-or-cancelled

Quote:


Change of holiday cost

Once a holiday is confirmed, a tour operator can only increase the cost if all of the following conditions are met:

it is more than 30 days before your departure
the booking conditions mention surcharges
the increase is due to an increase in transport costs, fees or taxes, or a change in the exchange rate.
The tour operator must absorb the first 2% of the increase.

If the increase represents a 'significant' change in price (ABTA argues this means more than 10%), then under the Package Travel Regulations you must be given the opportunity to cancel the holiday. The 10% figure is only a guide, and a smaller percentage increase could still be considered 'significant' on expensive holidays.


Hopefully those going out over Christmas and new year should be protected as its within the next 30days.
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 Otherwise you'll just go on seeing the one name:
Otherwise you'll just go on seeing the one name:
compostcorner wrote:
companies are now just using brexit as an excuse to cut jobs and raise prices, for years they have been trying to justify their actions, brexit must have been a message from heaven for some of them


I just got it the other way round, my local Renault garage gets their parts from the UK. He said parts are going up because of Brexit....... When I said the exchange rate is better now than 6 months ago he grumbled and told me they're going up........ because of Brexit. rolling eyes
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 Poster: A snowHead
Poster: A snowHead
We skied with MW this year. Whilst I understand the economics of the Brexit impact, MW (and other tour operators) did a really big push to get people to re-book their holiday again for the following year (ie 2017). They offered decent discounts. It seems a shame that much of the discount offered to book early is being eroded by the surcharge. It sounds desperate, otherwise why else would you annoy repeat customers who have booked early. Surely the plan would be to put the surcharge/price increase on those who book last minute or are later bookers.

We elected to do it ourselves this year, mainly because of budget and wanting our 3 yo to ski. The Brexit vote has cost us £300. As a consumer I took a risk and new that there was a chance that there would be an exchange rate fluctuation which could impact the price we paid. In fact post Brexit one of the first things I asked was whether the pricing would change - no it hasn't, but things like childcare and transfers have both gone up in price (though not for us). My expectation would have been that had I booked with MW, the price is fixed. Its the risk they take in selling/discounting holidays to attract early bookings. I would pay a premium over and above organising myself for price security and ease. Whilst MW has the right to make a profit on the sales, I can't help but think that this is likely to affect them more adversely. I, having read the thread, would seriously consider not booking through them going forward (Summer or Winter).
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Obviously A snowHead isn't a real person
Quote:

I suspect a company only making £1.5m EBITDA on £42m turnover has little choice but to pass on unexpected costs



that's even slimmer than I thought!
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Well, the person's real but it's just a made up name, see?
@HoneyBunny,
Quote:

^ but as far as I can tell, MW are the only holiday firm doing this? They were offering loads of cut price deals over Christmas and New Year, so is that what we're now paying for?

It doesn't really make a difference whether they are the only ones doing this. They may well have a different business model / approach to hedging etc. I also suspect they won't be the last to increase prices. No. I don't think you are 'paying for the cut price deals'. There are nearly always some deals at this time of year. Your question is a bit like asking whether people who bought an item two weeks ago are subsidising the deals on Black Friday. If MW thought they could sell those packages at full price they would have done. It is possible that bookings are down beacause of recent poor snow over Christmases and because people have been put off by the strong Euro.

I understand the argument that imposing a surcharge is unpopular and therefore a risky business decision, but I simply don't understand the view that passing on some of the currency hit is wrong/immoral etc. As a general point, would you rather they had simply fixed all their prices £50, or even £100 higher in the first place just in case the pound fell or do you prefer the current system where they only pass on currency costs if they actually happen?
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Lol.

Bad forex planning by management and now they expect you to pick up the tab Laughing
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rogg wrote:
compostcorner wrote:
companies are now just using brexit as an excuse to cut jobs and raise prices, for years they have been trying to justify their actions, brexit must have been a message from heaven for some of them


I just got it the other way round, my local Renault garage gets their parts from the UK. He said parts are going up because of Brexit....... When I said the exchange rate is better now than 6 months ago he grumbled and told me they're going up........ because of Brexit. rolling eyes


Were these Renault parts really manufactured in the UK, using only UK raw materials? Even if they were, and it seems a little unlikely, it's entirely feasible that Renault have a policy of pricing everything in euros and then selling it at the converted price.
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Gordyjh wrote:
I suspect a company only making £1.5m EBITDA on £42m turnover has little choice but to pass on unexpected costs


They may try and sell it as 'unexpected' costs and play the dumb card but they will have known in July what price increases they need to survive the winter. They have been around long enough to know what they are doing. They have instead chosen to let their order book fill up, waiting as long as possible before taking action as they know they have this clause in their t&c's and they know nobody reads t&c's.

It kinda stinks a bit but that's business, the clause has allowed them to take the gamble that rates might recover. But yeh, without hedging properly, there is no chance they can cover an 8% hit looking at their finances.
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@Simmy, Wasn't it right for them to wait and see if rates recovered? Hedging the currency effects we have seen in the last six months would also have cost them a packet and hit their finances pretty hard.
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The wording of it stinks a bit: "we have as promised absorbed the first 2%"

When as per @dklemm, post above, they are duty bound to cover this anyhow, regardless of any promise.
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Not clear if the surcharge is for the accommodation / food / transfers etc cost - which a TO should be able to control - or flights, which they probably can't (although if it was the latter then they would probably say so).

For the former, it could be reasonable to make a surcharge based on the difference in exchange rate between the date the brochure prices are set and the booking date - but they know what that is when anyone books, and a good TO could/should even bring the risk to customers' attention at the time. There isn't really a good excuse for a surcharge based on worsening exchange rates after the booking date.

The problem is that it is almost impossible to tell whether or not a TO is being reasonable or not. But as others have said, these decisions aren't made lightly - if things are so tight that charging those who have already booked will make a significant difference, some people will be even more wary of making a future booking.
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@foxtrotzulu, I don't think so as they arn't really gambling with their own money, but that of their customers. If they warn customers at time of booking that the sales prices shown are fictional because they have been calculated on a nonsense cost price and will likely have a surcharge payable at a later date they can't get out of, fair enough.

Feels like the kind of controversy that would bury other companies, I expect it is just bad business planning and this will be a last resort. If they have one saving grace, they won't be alone. Any UK company subject to currency risk is trying to manage price increase timings right now.
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foxtrotzulu wrote:
I understand the argument that imposing a surcharge is unpopular and therefore a risky business decision, but I simply don't understand the view that passing on some of the currency hit is wrong/immoral etc. As a general point, would you rather they had simply fixed all their prices £50, or even £100 higher in the first place just in case the pound fell or do you prefer the current system where they only pass on currency costs if they actually happen?


I would be happy with the current system if it wasn't a "heads the TO wins, tails the customer loses" situation. They never offer a refund, or reduce the outstanding balance, in the years when they make a significant profit from exchange rate fluctuations, so they shouldn't be able to pass on the opposite situation.

Since they won't operate that model it would be fairer if they charged the extra £50 or whatever in the first place, and removed the surcharge possibility from the T&Cs.
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And love to help out and answer questions and of course, read each other's snow reports.
foxtrotzulu wrote:
As a general point, would you rather they had simply fixed all their prices £50, or even £100 higher in the first place just in case the pound fell or do you prefer the current system where they only pass on currency costs if they actually happen?


Yes, because then it's my choice as to whether I pay it or not, rather than being forced to.

I don't really understand why you're defending them, do you think it's an acceptable way to treat loyal customers? I must have missed the refund when currency rates were better.
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So if you're just off somewhere snowy come back and post a snow report of your own and we'll all love you very much
HoneyBunny wrote:
^ but as far as I can tell, MW are the only holiday firm doing this? They were offering loads of cut price deals over Christmas and New Year, so is that what we're now paying for?

I won't be using them again as I now don't trust them not to increase my holiday price, and I'm also concerned they might go bust.



They were offering cut price deals because they were/are sitting on distressed stock and any cashflow is better than nothing - it's not a matter of you funding that. I think you're probably right about your second concern but realistically I'd say it's always a concern about any small to medium sized TO if they make a few bad judgements.
ski holidays
 You know it makes sense.
You know it makes sense.
I was contacted today by a reporter from Money Saving Expert - it appears that this has attracted the attention of the consumer sites.
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 Otherwise you'll just go on seeing the one name:
Otherwise you'll just go on seeing the one name:
The problem with that Martin Lewis stuff is that it all one way traffic - don't expect it to be a reasoned analysis of the modest return TOs make against the risk that they end up with unsold capacity.
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Poster: A snowHead
Someone's also made the point on Twitter that they checked the Mark Warner website and they are selling the holiday she's booked for less - but are increasing the costs for her!!

How is that fair?? They have gone about this so badly, they will lose so much more money because of doing this. Loads of loyal customers like myself will ditch them.

I'm not even going to check the website, it'll just make me angry.
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It is fair - part of the price she paid was a premium for securing what she wanted at an earlier date at a price she deemed acceptable and with terms she consented to re FX surcharge. It's hardly a secret that TO's slash prices as stock remains unsold. Yeah it's a double whammy getting the FX sting.

As others have said I suspect this move was a matter of survival for MW. Maybe they hope they can win customers back next season with some loyalty voucher discounts. If not it's not like there won't be others who haven't been stung this season willing to take up the places next winter if the price is right and the quality remains there. Customer loyalty doesn't always matter that much.
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Well, the person's real but it's just a made up name, see?
On a related, but unrelated(!), point... Most airlines imposed fuel surcharges when oil price started climbing around 2009. How many removed the surcharge when the price fell off the cliff around 2014? Not many! I guess we will shortly see a fuel-surcharge-surcharge.
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£42m turnover,£1.5m EBITDA, £670k profit before tax.

Highest paid director £180k

Apparently they do hedge and take a prudent approach when setting prices.

For those interested accounts can be downloaded here https://beta.companieshouse.gov.uk/company/02434787/filing-history
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£42m turnover,£1.5m EBITDA, £670k profit before tax.

Highest paid director £180k

Apparently they do hedge and take a prudent approach when setting prices.

For those interested accounts can be downloaded here https://beta.companieshouse.gov.uk/company/02434787/filing-history
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Quote:

£42m turnover,£1.5m EBITDA, £670k profit before tax.

bet they have mighty fine accountants - £134k corporation tax on a turnover of £42million ! Very Happy
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@Dave of the Marmottes, I will defer judgement on matters of survival til I see what the highest paid director takes home for this season. We probably all should.
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bobhitch wrote:
Quote:

£42m turnover,£1.5m EBITDA, £670k profit before tax.

bet they have mighty fine accountants - £134k corporation tax on a turnover of £42million ! Very Happy


Corporation tax is paid on profit not turnover. Travel industry has very low margins, this seams perfectly reasonable.
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If a holiday company is an ABTA member this must notify ABTA if they are applying a surcharge. ABTA list the companies here https://abta.com/holiday-help-and-complaints/how-can-we-help-you/what-abta-members-are-currently-surcharging

Unsurprisingly 4 of the 7 members applying a surcharge are ski holiday providers.

Mark Warner are not ABTA member (they left some years ago - 2011 I think).
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Quote:

Corporation tax is paid on profit not turnover. Travel industry has very low margins, this seams perfectly reasonable

I know - my reference to creative accounting is questioning the 1.5% profit margin on that turnover. I'm not involved in the travel industry but if I was ,and that is the true profitability in the sector, I would be getting the hell out.
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