A case of interest to B&B people.
Guests who make a booking but don’t pitch up are a major problem and when a travel agent is involved, it becomes even more complicated.
Travel agents say, effectively, “trust us; let the client stay and we’ll guarantee that you get your money afterwards”. After a while, however, this arrangement breaks down just one time too many and you start putting in clauses like – if you confirm and then cancel, you’ll have to pay anyway.
That’s what led to a case heard by the Gauteng North High Court last month:
Kievietskroon Country Estate v Department of Land Affairs.
In mid 2004 the Department of Land Affairs decided to hold a four day international conference. Its travel agent “selected”
Kievietskroon Country Estate outside Pretoria and asked for a provisional booking. This was done, subject to confirmation by the Department.
By mid August 2004 there was still no confirmation and Kievietskroon wrote asking whether the booking was to be confirmed or not. No reply. It wrote again, saying that unless immediate confirmation was received, the booking would lapse. A voucher was issued by another agent, guaranteeing payment.
The department then cancelled the booking even though it was informed that it would be charged 100 percent of the pro-forma invoice – R426 000.
The matter went to court and after hearing argument the judge said; ” However, If, as (in this) case, no goods or services are supplied, no VAT is payable”, so he deducted VAT, and ordered the department to pay Kievietskroon R373 650.00 as well as the costs of the case. Though we may cheer Kievietskroon for taking the matter so far, it would have been even better to have had some comment from the judge about the loss of business that the resort would have experienced by accepting the booking which was later cancelled – the 200 people that would have been turned away, for example, on the strength of the confirmed booking.
Given the significance of tourism to South Africa, we need everyone who does business in this sector to know that a contract is binding and that there will be penalties if it is broken.
Now, how to get the message across to the travel and booking agencies as well ….
Filed under: News
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