 Poster: A snowHead
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Echoing thoughts above...
I'm not surprised by MW's low margin, but I was slightly surprised to see that MW are no longer members of the ABTA scheme. I reckon there are a lot of biggish names trading off their reputation with customers who might assume that they are fully covered by the industry insurance schemes that were put in place following several high profile collapses. TO finances appear so very sensitive to cash flow and timing that they almost look like Ponzi finance - today's bookings playing for last month's bookings will are traveling today. Throw some FX and oil price fluctuations into the mix and you've got a very complex set of risks to hedge against. Then throw in uncertain demand due to consumer confidence, and top it off with a warm and sunny couple of weeks in the Alps and you've got a horrible pinch on cash right at the beginning of your major business period.
I sympathise with the OP that it must feel pretty rubbish to be tapped up for cash, especially when MW are selling holidays at a discount. I reckon that it is probably pretty desperate in MW's offices right now. As a punter if probably prefer to be tapped up for a couple of hundred quid than have TO fail, though.
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Obviously A snowHead isn't a real person
Obviously A snowHead isn't a real person
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Surprising that MW chose not hedge one of the key risks that they are not in business to benefit from, but an argument they didn't need to hedge as they had a T&C that allowed them to pass on their loss to customers rather than to a counter party in a hedging contract. These are low margin businesses - consumers have driven that however as price is a big driver, as demonstrated by this thread. MW are an independent company - many brands are part of the jumbo TOs like TUI who have a more globally diverse business - this will bring benefits and challenges and we are seeing the challenges.
It may not feel great, but I'd think about the ethics of the business that I was dealing with and if this is a genuine and regretted reaction to unusual circumstances, I'd pay up and keep in the locker for a time when I needed a bit of a favour back the other way. If i thought it was a money making exercise then I'd make more of a fuss, although T&Cs prob mean not much chance of positive outcome. Not used them personally but heard a number of good things about MW so I'd be in the pay up camp.
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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?
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| alti - dude wrote: |
| Surprising that MW chose not hedge one of the key risks |
Yes and they are blaming Brexit when most savvy business people could see that the £ was over-valued and the adjustment was going to happen some time soon anyway.
Call me cynical but maybe they did hedge and maybe they are using the opportunity to grab some more margin. £50 per person times thousands of people adds up. Just sayin'.
So I would have a good look around for alternatives and go for the full refund. If they are really having to do this for economic reasons you have to ask yourself what other corners are being cut because the numbers people look at both ends of the equation - has the food and wine budget been cut?
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@Pruman, full refund isn't an option, as they have kept the increase below that so they don't have to give refunds. That's why people are so annoyed. I would he to, in their boat.
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Anyway, snowHeads is much more fun if you do.
Anyway, snowHeads is much more fun if you do.
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@NickyJ, ah, I see. That's unfortunate.
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| Quote: |
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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It IS a crappy business. Particularly ski chalets. There are too many people trying to do it as a lifestyle business or funded by the bank of Mum and Dad and that means excessively competitive pricing that prevents decent profitability. Good for consumers though! Honestly I think the long view on this is that ski package holidays are really good value because margins are thin but this means that they don't have much wiggle room when the macro goes against them so surcharges have to be part of the business model.
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Yes and they are blaming Brexit when most savvy business people could see that the £ was over-valued and the adjustment was going to happen some time soon anyway.
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That is garbage. People occasionally say that in one thread or other but:
1. forex is the deepest most liquid market of the lot. That means that pricing reflects all the opinions out there. There are an equal number of "savvy business people" who think it will go up as will go down at any point in time
2. The 30 year average $/£ rate is 1.64 (just checked and it has spend the majority of the time in the range 1.5 to 1.7 below that in 86, 92-94, 01-02, briefly in 09 and this year. It was higher than the range 03-08 and at times on the late 80s/early 90s
3. we have only been at the current rate briefly in 84-85 when you may remember we had a crippling recession that wiped out a lot of the industrial North, riots, etc
To suggest that everyone sensible knew that the right price was <1.30 is complete and utter rubbish. Somewhere in the 1.50-1.70 range is probably a much better guide in the long-term.
Obviously I've been talking about the $ rate here and MW's exposure is Euro but the same principles apply.
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You'll get to see more forums and be part of the best ski club on the net.
You'll get to see more forums and be part of the best ski club on the net.
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| tomj wrote: |
Echoing thoughts above...
I'm not surprised by MW's low margin, but I was slightly surprised to see that MW are no longer members of the ABTA scheme. I reckon there are a lot of biggish names trading off their reputation with customers who might assume that they are fully covered by the industry insurance schemes that were put in place following several high profile collapses.. |
Mark Warner are not a Travel Agent so why would they need to be in ABTA. They say they are full members of ATOl which is what you would expect : http://www.markwarner.co.uk/atol
Caveat - anyone who remembers the Chris "Conman" Reynard saga will know that travel industry "schemes" are not necessarily worth the pixels they occupy http://snowheads.com/ski-forum/viewtopic.php?p=1816405
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@jedster, you are spot on - people who say that the market was overvalued/undervalued and it was easy to see are suggesting they know the market better than the market makers. These people should therefore been in financial trading as they would make a killing !
A pure market is in effect the weighted average of opinions, and opinions of people better qualified to have opinions than most. This is the reason why MW should have probably hedged as they understand the ski holiday market but not the FX market - guess they will have debated and agreed to take the risk on the basis that a) the risk was manageable (proved to be wrong on that) and b) if it became an issue they had a T&C they could rely on. FX hedging is not hugely expensive and is a megga market but in thin margin businesses perhaps not a cost they could incur.
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snowHeads are a friendly bunch.
snowHeads are a friendly bunch.
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| Quote: |
Obviously I've been talking about the $ rate here and MW's exposure is Euro
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Exactly. In my industry the pound being overvalued against the Euro has been talked about long before Brexit.
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And love to help out and answer questions and of course, read each other's snow reports.
And love to help out and answer questions and of course, read each other's snow reports.
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Do Mark Warner have to prove they have been adversely affected by the Euro rate to activate this clause? If not they may have bought some currency in advance and simply sold fewer holidays than expected eg. Christmas and New Year and be trying to recoup their loss however they can.
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| snowymum wrote: |
| Do Mark Warner have to prove they have been adversely affected by the Euro rate to activate this clause? If not they may have bought some currency in advance and simply sold fewer holidays than expected eg. Christmas and New Year and be trying to recoup their loss however they can. |
That MAY be the case but I doubt it. They would have been well aware of the upset and reputational damage inacting the surcharge clause would cause so are unlikely to have gone down this route if they really didn't have to.
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You know it makes sense.
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| Quote: |
Exactly. In my industry the pound being overvalued against the Euro has been talked about long before Brexit.
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FFS - and you would have found just as many people arguing it was undervalued which is why the price is what it was!!!
How hard is that to understand?
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Otherwise you'll just go on seeing the one name:
Otherwise you'll just go on seeing the one name:
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@snowymum,
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Do Mark Warner have to prove they have been adversely affected by the Euro rate to activate this clause?
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Yes, I think there is some oversight of this. The surcharge has to be limited to the financial impact suffered by the company.
@alti - dude,
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| Surprising that MW chose not hedge one of the key risks |
Do we have any evidence that MW didn't hedge their currency exposure? I'd be absolutely astonished if they didn't have a combination of natural hedges and financial hedges in place. That doesn't mean they have eliminated all risk l just reduced it to a level they felt was manageable. I am not sure I've ever worked with a company who have hedged their currency exposure 100%. Usually they will only hedge part of their exposure or only hedge it up to a certain point.
@NickyJ, I wrote a long and tedious response to your post of yesterday which I then deleted by miostake and subsequently lost the will to live. In answer to your question, yes, I do think the imposition of a surcharge is reasonable and acceptable. I understand why you don't like it, but that doesn't change the basic point. You agreed to the contract and surely MW can expect you to abide by it as much as you would expect them to do so. Their contract explicitly makes clear that they are not accepting 100% responsibility for exchange fluctuations.
You also complain that MW are now selling cheap holidays. Don't forget that for any holiday more than 30 days ahead those people will also be liable for a potential surcharge (if the rate moves again), which may be significantly more than the one you faced. One area where I would agree with you is that, wherever possible, the surcharge should be included in the selling price. i.e. they should not be able to sell holidays knowing that they already plan to issue a surcharge.
Interestingly, Thomas Cook (and others?) have a clause in their contract that says they WILL issue a refund if costs fall "If any change in our costs would cause a reduction in your holiday price, we will not make refunds of amounts less than 2% of your holiday price (calculated as above), but we will refund in full amounts exceeding such 2%, after deducting an administration charge of £1." Not surprisingly, this doesn't happen often, but largeley because operators do everything they can to get the price right in the first place.
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Poster: A snowHead
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Whilst I can understand the frustration caused being hit with a surcharge it's also a lesson to us all to check the T&C's. How many of us simply select the product that we want an hit the buy button, especially when buying online.
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Obviously A snowHead isn't a real person
Obviously A snowHead isn't a real person
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@foxtrotzulu, my issue is not per se with them saying their cost have increased there for we need to make a surcharge, my issue is that you dont have any rights to say no cancel the whole booking then. If it were a product you had pre-ordered x then they turn round and say due exchange rate changes you will now have to pay more you would have the right to say no. I know it is "in the terms and conditions you agree to" but as they all have it the consumer is left with very little option to accept and hope it doesn't get called upon or not book a holiday. Or just book last minute where you are actually better protected than loyal customers who give these companies deposits often more than a year in advance.
Looking at the detail of the Esprit T&C (which is who I am booked with) and comparing to Mark Warner's. Esprit's wording states surcharges are only for "unexpected" events whereas Mark Warner doesn't have that qualifier.
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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?
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@NickyJ,
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my issue is that you dont have any rights to say no cancel the whole booking then.
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Well, obviously you have the right to cancel if the supplement is more than 10%. However, I think one has to take a pragmatic view on this. Booking a holiday is not like buying a product on-line, for two reasons. First, the time scale, and second the total cost. I'm not sure it is fair on a TO to allow a customer to cancel a £2,000 holiday booked and held for several months on the basis of, say, a £10 supplement. There has to be some limit. Whether 10% is too high, I don't know. It's similar to the situation when a TO changes flight times. A small change by a few hours is acceptable but a major change gives you the right to cancel.
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Esprit's wording states surcharges are only for "unexpected" events whereas Mark Warner doesn't have that qualifier.
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True, but it does refer to changes that occur after the time of booking, so you would have to prove that MW was aware that the exchange rate would change (clearly impossible) or that fuel price increases had been announced. I don't think that the inclusion/exclusion of the work 'unexpected' means very much.
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Give Mark Warner a break! (I've got nothing to do with them except for I've been on one great holiday)
No doubt they understand the reputational risk and this is a last resort, would you prefer they went bust and had to cancel your holiday? (or both holidays if lucky enough to be in that position)
Ask yourself - had the price been £40 higher at time of booking, would you have gone with a different company?
I'm looking at booking a week in February, earlier this week the price went up £50 compared to last week - bit annoying but it has changed the likelihood of me going on holiday with them.
I'm not saying they've done a good thing, but some of the comments on here are way over the top,
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Anyway, snowHeads is much more fun if you do.
Anyway, snowHeads is much more fun if you do.
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| foxtrotzulu wrote: |
.... There has to be some limit. Whether 10% is too high, I don't know. It's similar to the situation when a TO changes flight times. A small change by a few hours is acceptable but a major change gives you the right to cancel.
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I have been similarly annoyed by this in the past as well, what constitutes a "major change" is upto the TO not the consumer. Yet what is a major change is TBH a personal thing, and I personally DO think the decision should be upto the consumer.
My mind is not going to be changed on this, I don't think it is right but have to lump it due to all TO's doing it.
I don't see why I should give Mark Warner a break? I am the same as you CornishBoarder I have been with them once before, wouldn't call it a great holiday but acceptable, and had looked at them again since. I won't now, and that is my personal choice.
The reason for drawing attention to the "unexpected" part of the condition is that at time of booking the referendum was well publicised, the impact on the exchange rate one of the many reasons being told why voting in was a good idea, so I would say that gives you argument to say it wasn't an unexpected event.... however it is immaterial Esprit Ski have informed their customers they won't be making a surcharge, and Mark Warner don't use that wording.
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| NickyJ wrote: |
Looking at the detail of the Esprit T&C (which is who I am booked with) and comparing to Mark Warner's. Esprit's wording states surcharges are only for "unexpected" events whereas Mark Warner doesn't have that qualifier. |
That's interesting, probably why Espirit arn't following as the 'unexpected' depends on what the rate was at the time of booking. Mark Warner's t&c's leave it open so they can do it even for post-brexit bookings, regardless of the ethics.
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| CornishBoarder wrote: |
Ask yourself - had the price been £40 higher at time of booking, would you have gone with a different company?
I'm looking at booking a week in February, earlier this week the price went up £50 compared to last week - bit annoying but it has changed the likelihood of me going on holiday with them. |
I'm guessing most people booking with MW are families or groups so its always a multiple of that surcharge you're looking at. A single dude being asked for another £50 is neither here or there, a family dude looking at another £250 takes a different view because family ski trips are already an eye-watering experience.
In previous years, did you ever have a tour operator write to you and offer money back because the currency had moved in their favour? No, thought not.
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| NickyJ wrote: |
| The reason for drawing attention to the "unexpected" part of the condition is that at time of booking the referendum was well publicised, the impact on the exchange rate one of the many reasons being told why voting in was a good idea, so I would say that gives you argument to say it wasn't an unexpected event. |
I think that you could easily argue that the outcome of the Referendum was unexpected until quite close before the actual ballot.
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You'll get to see more forums and be part of the best ski club on the net.
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| Pruman wrote: |
| alti - dude wrote: |
| Surprising that MW chose not hedge one of the key risks |
Yes and they are blaming Brexit when most savvy business people could see that the £ was over-valued and the adjustment was going to happen some time soon anyway.
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So you went all in then and are now reaping the rewards of the obvious overvaluation? 
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@NickyJ, If the currency move had been 'expected' then the rate would already have changed. That's not to say that it wasn't a possibility, but it certainly wasn't expected.
@Pruman,
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In previous years, did you ever have a tour operator write to you and offer money back because the currency had moved in their favour? No, thought not.
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But in most cases, you are entitled to it, so either the event hasn't happened or we haven't heard about it. Probably a bit of both.
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snowHeads are a friendly bunch.
snowHeads are a friendly bunch.
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I do know a couple of people who exchanged their holiday currency earlier than they would have in case the vote was for "Out".
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And love to help out and answer questions and of course, read each other's snow reports.
And love to help out and answer questions and of course, read each other's snow reports.
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| Richard_Sideways wrote: |
| It's a bit galling - Suggest maybe a Twitter and/or FB post may yield more results than dear old SH. |
There are people on Twitter talking about it.
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Maybe you should ask them to prove the 8% increase?
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You know it makes sense.
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| NickyJ wrote: |
| I do know a couple of people who exchanged their holiday currency earlier than they would have in case the vote was for "Out". |
That's different to it being expected though, that's just taking the chance.
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Otherwise you'll just go on seeing the one name:
Otherwise you'll just go on seeing the one name:
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| Quote: |
I'm guessing most people booking with MW are families or groups so its always a multiple of that surcharge you're looking at. A single dude being asked for another £50 is neither here or there, a family dude looking at another £250 takes a different view because family ski trips are already an eye-watering experience.
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Single parent taking two children, so £150 for me. Which is about a 3% rise on the cost of the family holiday. Overall it wouldn't change my decision if I went with MW versus another TO. I don't begrudge it either, still offers great value compared to esprit.
I want them to stay in business.
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Poster: A snowHead
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| jedster wrote: |
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Exactly. In my industry the pound being overvalued against the Euro has been talked about long before Brexit.
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FFS - and you would have found just as many people arguing it was undervalued which is why the price is what it was!!!
How hard is that to understand? |
But by definition one side of the argument was wrong and thus their opinions were objectively bunk - it just couldn't be proven. Sentiment IMO kept it up; logic was definitely pointing down (globally speaking). Obviously it's a counterfactual now thanks to Brexit but the IMF for one thought the £ was quite seriously overvalued (by up to 20%) in 2015. The Bank of England said much the same. From memory Deutsche Bank predicted 1.15 vs Euro in 2017 if we stayed in the EU.
Re Mark Warner I don't suppose they had much choice if the alternative is to go bust (not saying it was, but as others have said margins are very thin). I would grit my teeth and pay. No, punters don't benefit when the currency goes up - I guess someone could try asking them to add in a clause!
I would be amazed if they weren't hedged though. Is it a plc or privately owned?
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Obviously A snowHead isn't a real person
Obviously A snowHead isn't a real person
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@CornishBoarder, the difference is you have the choice whether or not to pay it. I don't.
It's a shit way to treat loyal customers, I've been on about 17 MW holidays in the past ten years.
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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?
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You need to Login to know who's really who.
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@northernsoulboy,
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No, punters don't benefit when the currency goes up - I guess someone could try asking them to add in a clause!
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The clause is already there in every contract I've looked at. Here is the MW contract:
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| Once the price of your chosen holiday has been confirmed at the time of booking, we will only increase or decrease it in the following circumstances. Price increases or decreases after booking will be passed on by way of a surcharge or refund. A surcharge or refund (as applicable) will be payable, subject to the conditions set out in this clause, in the event of changes in transportation costs (e.g. fuel, scheduled airfares and any other airline surcharges which are part of the contract between airlines (and their agents) and the tour operator) and/ or in any dues, taxes or fees payable for services such as landing taxes or embarkation or disembarkation fees at ports or airports and/or where our costs increase or decrease as a result of any changes in the exchange rates which have been used to calculate the cost of your holiday. Even in the above cases, only if the increase in our costs exceeds 2% of the total cost of your holiday (excluding any amendment charges) will we levy a surcharge. We will only levy a surcharge in respect of the amount by which any increase in our costs exceeds 2% of this total holiday cost. If any surcharge is greater than 10% of the cost of your holiday (excluding any amendment charges), you will be entitled to cancel your booking and receive a full refund of all monies paid to us (except for amendment charges) or alternatively purchase another holiday from us of a similar standard as originally booked if available (if the alternative we specifically offer you is less expensive, you will receive a refund or price reduction, but if it is more expensive, you will not be asked to pay any more. If you wish to purchase a holiday other than the one we specifically offer you, you will have to pay the applicable price). A refund will only be payable if the decrease in our costs exceeds 2% as set out above. Where a refund is due, we will pay you the full amount of the decrease in our costs |
Actually, that's biased in the customer's favour. They absorb the first 2% of cost increases but pass on all of the decrease (assuming it is greater than 2%).
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Anyway, snowHeads is much more fun if you do.
Anyway, snowHeads is much more fun if you do.
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| blahblahblah wrote: |
| https://www.familiesonline.co.uk/families-favourites/mark-warner/50pp-off-your-family-holiday |
What's interesting about that is not the price decrease / discount, but the fact that only new customers are eligible. Long-standing loyal customers are not. Is it immoral for a company to offer introductory discounts? I don't know.
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| foxtrotzulu wrote: |
| blahblahblah wrote: |
| https://www.familiesonline.co.uk/families-favourites/mark-warner/50pp-off-your-family-holiday |
What's interesting about that is not the price decrease / discount, but the fact that only new customers are eligible. Long-standing loyal customers are not. Is it immoral for a company to offer introductory discounts? I don't know. |
Depends if Mark Warner has a separate set of loyalty discounts for repeat customers or not. The repeat customers may have had a separate early booking/loyalty offer?
If one books early there is always a risk that the same holiday might go down in price for late bookers. There is also the chance the holiday might be advertised later on at a higher price if an early booking discount has expired or the TO has had to put up prices due to the exchange rate changing (rather than doing what MW have done and charging the existing early booking customers instead).
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| foxtrotzulu wrote: |
| blahblahblah wrote: |
| https://www.familiesonline.co.uk/families-favourites/mark-warner/50pp-off-your-family-holiday |
What's interesting about that is not the price decrease / discount, but the fact that only new customers are eligible. Long-standing loyal customers are not. Is it immoral for a company to offer introductory discounts? I don't know. |
Like every large company? SKY, BT, Etc , deals for new people, never for existing. I cancel my Car magazine subscription every 6 months, and get sent a mug or a torch when I renew it ( the same day) sometimes I get 5 for a pound. The apartments I use in France have a 10% discount for returning clients, they don't make a big thing of it, they just take it off the bill, and I like that and keep returning.
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You'll get to see more forums and be part of the best ski club on the net.
You'll get to see more forums and be part of the best ski club on the net.
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The problem is then you get emails from Jelly & Ice cream who run child care services in France saying that they have reduced their prices. They employ British Nannies, pay in Euros, I get they don't have some of the large overheads, but you would have expected that if anything Nanny prices would have risen on the back of a weaker pound.
I am with @HoneyBunny on this one. You expect better from a company like Mark Warner - they aren't cheap, they provide a good standard, but by no means luxurious - a family of 5 skiing first week of April pre-surcharge ranges from £5,100 at L2A to £8550 at Tignes - that is before lift passes, ski hire and childcare. Terms or no terms, it is not unreasonable to expect that when you book 6 or 12 months in advance that the price agreed is the price you will pay. They could have made the £50 back in so many other ways - pass on the ski hire cost increase; pass on the lift ticket price increase; pass on the cost of ski lessons - I doubt many people would have been bothered by this - because the price increase would be visible.
My question has to be how are you not making money charging the prices that they charge?
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OK so boycott MW it's your right as a consumer. Maybe don't moan then that Esprit doesn't seem to have any availability and there aren't any other volume tour operators to accommodate the very specific childcare offering that MW do offer.
I've seen plenty of businesses and the margins they make. Maybe some of them aren't supremely efficiently run but it is often quite interesting to see how in many cases consumers are actually getting a pretty good deal rather than being ripped off particularly if they are maximising discounts and promos available. As ever the key is in being a savvy consumer and ability to take on risk yourself - e.g. are you prepared to buy very early on airfares for the cheapest price even if the dates might not pan out, are you prepared to wait until the day before to book your ski package hol from what is left on the shelf.
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FAQ
I really don't think this is a decision made lightly, MW will be aware of the short term damage that this will do to their reputation and the knock on effect that may have. The fact that they're still selling 'cut price' holidays over the season looks a bit crap though. I guess that it's a bit like DFS selling sofas, people like to think that they're getting a deal so you have the 'list price' higher than needed and knock off some money so it looks good.
