First Bank

Monday, November 16, 2015

Skye Bank, travel agencies partner on travel finance

In its determination to make vacation and other forms of travel pleasant, affordable and easy, Skye Bank Plc has gone into partnership with some leading travel agencies by providing travel financing.

At the unveiling of the partnership in Lagos on Friday, Skye Bank’s Head of Retail Banking Group, Nkolika Okoli said the bank would provide financing for the customers to be able to buy their tickets and/or travel packages in good time to enjoy reduced fares.

According to her, the bank would provide 80 per cent of the travel cost while the intending traveller will provide just 20 per cent of the total travel cost at a minimal interest rate. The customer can they repay the loan over a maximum tenor of 12 months.

Explaining the rationale for the special partnership, Okoli said because most people who travel in Nigeria are salary earners and small business owners in the middle income segment, they are wont to save up for their travel over a long period of time so end up buying their tickets two or three weeks to the date of travel.

“What this means is that they buy their tickets at a high price. But if you buy your ticket three or four months before your travel date, you may probably save 50 or 60 per cent of what the person who buys two weeks to his travel pays”, she said.

Okoli said the new partnership would enable travellers to get the best package, saying the essence of the new financing package is to encourage travellers to buy their tickets early enough to take advantage of low fare.

She noted that the existing practise where travel agencies sell tickets on credit and use their money to pay airlines is capable of eroding their capital and affect their operations since their margins are usually small.

Also speaking at the occasion, the Managing Director of Dees Travels and Tours Limited, one of the partners, Mr. Daisi Olotu, commended Skye Bank for the innovative arrangement which has taken away from the agencies the risk of customer indebtedness over ticket.

Olotu said while the travel agencies must remit the ticket fares to the airlines within 14 days, travellers often buy ticket on credit and may not pay immediately, noting that Skye Bank has solved the agencies’ major problem.

Also speaking, the Chief Operating Officer of, Omolua Nwoke said Skye Bank had taken away their major burden by making it possible for travellers to be able to travel and pay with convenience.

The General Manager of Tour Brokers International, Odion Chigbufue, said the arrangement with Skye Bank enables her company to pay the airlines and their ground handlers without running the risk of clients default in paying for ticket

An executive of Pasture Travels and Tours Limited, Funke Yerokun, commended the bank for the initiative, describing it as the much needed solution to the problem besseting the travel and tours industry. Yerokun said it would help agencies to overcome their cash flow problems.

Okoli ended the briefing by calling on other travel agents to join the partnership to reduce the pressure placed on their cashflow by credit sales as this will have a direct positive effect on their trading margins through reduced cost of funds

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