New Credit Restrictions for Corp Travel Agencies Will Bring Heavier Financial Burdens
Photo Credit: Agencies could be perceived as risky businesses to deal with following months of travel restrictions. Adobe / only_kim
Skift Take
That insurers may be pulling credit cover won't come as a surprise in the middle of a crisis and potential recession, but it's hardly the agencies' fault if they have a bad rep. What they really need is all the support they can get when restarting operations.
The business travel rebound could place undue pressure on corporate travel agency finances, the CEO of a travel management company has warned, and even lead to some going under.
A return to pre-coronavirus levels of bookings should be welcome news after months of corporate travel freezes, but Gray Dawes Group boss Suzanne Horner said some suppliers have stopped offering credit to agencies after their cover was withdrawn by nervous trade credit insurers.
As a result, some of the smaller agencies that previously relied on credit from suppliers will need to fund hotel bookings themselves, or change terms with clients and request payment upfront.
Trade credit insurers cover the risk that a company’s customers cannot pay for goods or services bought on credit. Suppliers, including hotels, take out trade credit insurance to safely sell to customers knowing they are insured should the customer fail to pay their debts.
Insurers will analyze the credit worthiness and financial sta
