The Britain’s competition watchdog is likely to get hold of event management companies who have refused to refund the deposits made for cancelled or delayed events due to the outbreak of Coronavirus and a subsequent lockdown due to it. Wedding and private events were severely impacted amid the coronavirus crisis as people were asked to stay away from mass gatherings and practice social distancing.
Competition and Markets Authority (CMA) recently released an update on the work of the task force, created by it earlier in March. The UK competition watchdog is probing thousands of complaints from buyers who have been denied refunds against cancellations by package holiday firms. The lockdown induced by the novel coronavirus pandemic forced the hospitality sector to shut down operations, and people were compelled to drop their travel plans.
The Covid-19 taskforce would investigate the package holiday firms and take appropriate actions. CMA is planning to take strict action against firms which offered vouchers in terms of cash or insisted consumers on rescheduling. The CMA would take the non-compliant businesses to court.
According to the CMA, the consumers are eligible for a 100 per cent refund as they were not provided with the service they opted for. This would also include the cancellations triggered by the Covid-19 induced travel restrictions. In many cases, the consumers are struggling to contact the businesses due to lesser staff, and many consumers have even been denied refunds.
The complaints related to air travel are beyond the jurisdiction of CMA. However, the civil airline regulator, the Civil Aviation Authority (CAA) is available for addressing consumers queries. Despite the challenges the industry is currently facing, consumers are entitled to receive a refund for their cancelled flights according to CAA. The CAA had backed the idea to offer rescheduling and cash vouchers to the consumers as an option only, the consumers should be offered a refund of their money without unnecessary complexities as they have not taken any service.
Most of the sectors in the United Kingdom witnessed catastrophe, as the coronavirus pandemic continues to mount pressure on the global economy. Travel & Leisure and Hospitality are some of the sectors which are severely impacted due to lockdown induced by the Covid-19 outbreak and have witnessed major redundancies in terms of the job.
Most of the people cancelled their planned events and travel due to the pandemic, which resulted into a halt in business operations in the sector. There were a few instances in which businesses forced consumers to accept vouchers instead of cash refunds and introduced several unnecessary complexities for refund-related procedures as well as charging them with an unnecessary high amount for cancellation.
The CMA has received nearly 60,000 applications from consumers about coronavirus-related issues from 10 March to 17 May 2020. On average, CMA received nearly 900 submissions per day during the period. 90 per cent of the complaints are regarding refunds and cancellations.
The holiday-related complaints about cancellations and refunds stood at circa 20 thousand, which were nearly three times to that of complaints in the food & beverages sector. The complaints in the aviation sector were about 8 thousand. Competition and Markets Authority had a close eye on these malpractices. The UK watchdog ensures compliance of businesses with the legal framework and encourages healthy competition in the market so that the benefits are passed on to the consumers. The authority condemns anti-competitive activities and other malpractices.
Previously, CMA was in talks with the government regarding special legislation to control profiteering by certain businesses amid the coronavirus crisis. CMA received several complaints against UK supermarkets for surge pricing for essential items such as Dettol and Toilet paper.
The Travel & Leisure sector has been devastated by the outbreak of the deadly virus. As the world economies started to impose lockdown and travel restrictions, the industry outlook became negative, which can be validated from the fact that most of the Travel & Leisure stocks plummeted between February and March. On 23rd March complete lockdown was imposed in the UK. The markets, however, have shown some signs of recovery, as it is believed that the UK has passed its peak with respect to the novel Coronavirus. Let us discuss stock performances of some prominent names from the sector during the coronavirus crisis. (The data is taken from the London Stock Exchange website.)
- Carnival Plc
Carnival Plc (LON: CCL) which presently owns a fleet size of over 100 is the biggest travel and leisure company in the world and is amongst the one of the most financially strong and profitable companies of the industries.
By the mid of March, the shares of the company were under immense pressure and created a new bottom of GBX 581 on 2 April 2020. Since then, the shares of Carnival Plc seem to have recovered by 68.50 per cent. The Footsie listed group, with the ticker symbol “CCL” traded on LSE at GBX 995.40 along with a market cap of £1,788.13 million on 22 May 2020 at the time of writing. (GMT 12:50 PM before the market close)
- InterContinental Hotels Group Plc
InterContinental Hotels Group Plc (LON: IHG) is into hotel operations. The company owns, franchise, manages and leases hotel. The company has its operations worldwide.
By the mid of March, the shares of the company were under immense pressure and created a new bottom of GBX 2,161 on 19th March 2020. Since then, the shares of InterContinental Hotels Group seem to have recovered by 64.46 per cent. The Footsie listed group, with the ticker symbol “IHG” traded on LSE at GBX 3,632 along with a market cap of £6,491.61 million on 22 May 2020 at the time of writing. (GMT 12:55 PM before the market close)
- Easyjet Plc
Easyjet Plc (LON: EZJ) is the low-budget airline of Europe which helps the travellers to travel in a more affordable & reasonable way.
By the mid of March, the shares of the company were under immense pressure and created a new bottom of GBX 410 on 19th March 2020. Since then, the shares of Easyjet Plc seem to have recovered by 40.20 per cent. The Footsie listed group, with the ticker symbol “EZJ” traded on LSE at GBX 567.90 along with a market cap of £2,283.15 million on 22 May 2020 at the time of writing. (GMT 12:58 PM before the market close)
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