Leisure Credits or Vouchers?


A consumer will appreciate that Leisure Credits (LC) or Travel Vouchers (TV) come in different forms and are particular to each seller. They are, in short, an internal and exchangeable closed loop currency.

Internal currencies are regulated (in respect to validity) by electronic data commonly referred to as “e” money. All open (and some closed) loops have to comply with the Electronic Money Regulations 2011. In the UK those regulations are policed by the Financial Services Authority (FSA).

After investigation one such offering of the holiday products works this way:

  • The travel company offering the credits has negotiated a discount with tour operators, airlines, spa resorts, hotel groups and general leisure enterprises etc as they have vast buying power.
  • Due to the volume of booking they place each year and with the various companies, the Leisure Credit companies and Travel Voucher companies (LCC & TVC’s) are entitled to and have negotiated large discounts from the standard rack rate charged by the suppliers of the leisure product.
  • The LCC & TVCs (once all the discounted arrangements are in place) then offer the leisure products for sale and to the travelling consumers.
  • The discounted rates are given directly to the consumers and those discounts are shown on each and every product they market. In short, the consumer gets practically all the discounts the LCC & TVCs obtain. The consumer does not get every bit of the discount as the LCC & TVCs have a need to fund the booking process (i.e. handling fees).

The holidaying consumer therefore has a need to see the discounts on offer so that they can correctly determine if the product serves the consumer's purpose and the product cost is in line with their expectations.

The consumer discount (in reality) should far surpass any discounts that the consumer could have negotiated on their own.

Clearly, the LCC & TVCs is an intermediary and need to make a profit from the service it provides to the consumers. So LCC & TVCs creates an internal currency which for all intense and purposes is the credits or vouchers themselves.

So, say a hotel advertises for a week which costs £500 and you have a flight costing £300, the combined rack rate is equal to £800 however as the LCC & TVCs companies claim to have arranged discounts of say 40% and you the consumer receives the holiday for £480 - a discount of £320 in this example.

When paying for the holiday the offer is subject to you paying a proportion of the holiday cost in the form of the internal currency to say 320 leisure credits.

Therefore in reconciliation, any consumer before entering the leisure credit holiday scheme should view the holidays on offer and see how many credits are required and apply the cost of those credits as an addition to the purchase price.

On some occasions, those credits are sold for a fraction of the market price, so £10 of credits are sold for say £1. When you price up the advertised costs of the holiday and see the discounts available and add back the costs of the credits a consumer can clearly see the discounts available.

In some cases, it is a very real and worthwhile discount, on other occasions it’s not. In short, it’s for each and every consumer to decide which holiday offers the best price and for the holiday they require.


So what is the problem, and why all the fuss?

The leisure credit companies obviously want your business and like every business, employ sales promotions so as to get your holiday £’s. As some holidaymakers have timeshares which they do not want and they wish to get an exit from, the LCC & TVCs offer to ingoing consumers to take off you the timeshare you wish to exit. This, in reality, frees up the commitment of the timeshare product you want to dispose of.

As they target the timeshare industry products and that industry would lose out (as their consumers have vanished) you can now understand why the timeshare industry wishes to emblazon the holiday credit industry with a bad reputation when in reality it’s not.

For 3 score years and more, the timeshare industry has embarked on mis-selling and breaching many established principles and practices. Now the timeshare industry courts the attention of the regulatory departments, government agencies and lawmakers. They are indeed under attack by a lot of institutions, consumers, firms and enterprises yet little changes in the world of some timeshare selling policies.

What the timeshare industry lacks is an effective industry force with a determination to clean up its act or a will to behave in a manner expected of a service and hospitality industry. They repeatedly create smokescreens and an intricate web of self-styled promotions and unregulated teams of unqualified companies and individuals who instead of servicing the need to change the disreputable accent timeshare, attracts it to promote a continuance of some bad and disrespectful practices.

I am sure that some LCC & TVCs might be roguish, as rogue enterprises are embedded in all types of industries, however despite the habitual screams of the timeshare industry, there is little evidence of the bad practices suggested.

It is for the consumer to adjudicate if the products offered by LCC & TVCs are reasonable and fair and ultimately serves their needs, not the squealing competitors who have been caught napping.