- Fewer than one in five CHOICE survey respondents received a full refund, and it often took many months
- Many consumers who received credits or vouchers say they're unlikely to be able to use them
- Travel agents have successfully secured $7 billion in credits and refunds
In a COVID-19 travel cancellations survey that consumer advocate CHOICE ran in March 2021, 90% of participants (3865 of the 4295 people) wanted the law changed to make it easier to get a refund.
CHOICE says it’s not surprising considering that fewer than one in five (17%) said they got a full refund after their travel plans were cancelled.
The survey found refunds or other remedies took more than six months to arrive, and Australian travellers aren't happy about travel businesses holding on to their money for so long – or about not getting it back at all.
CHOICE says the survey shows many Australians have lost trust in the travel industry.
Travel agents have so far successfully secured $7 billion worth of credits and refunds for COVID-impacted travel from hotels, airlines, tour operators, cruise liners and other suppliers on behalf of their clients with an estimated $3 Billion (the majority of which is now in credits) still outstanding.
The process of getting these refunds and credits is incredibly time-consuming, complex and often frustrating with the suppliers’ Terms and Conditions determining whether a credit or refund is available. Agents have been providing this support to consumers despite agents experiencing revenue falls of 90%-plus from the imposition of the international travel ban in March 2020.
Australia's market regulator, the ACCC, has warned that the right to a refund could be affected when an event was shut down by government restrictions, and that smaller businesses may take longer to respond, "because the impact of this pandemic is both unprecedented and complex".
Unless the terms and conditions of your travel agreement specify your right to a refund, you may be offered a credit or voucher instead. But, as the regulator points out, credits or vouchers "should have an expiration date which is long enough to allow you to use the credit note or voucher".
Over half of the people surveyed said they waited more than three months for a refund, credit or some other resolution.
Some people seeking credit card chargebacks were told the time limit had expired, even though cardholders had no control over the time span between booking a trip and its cancellation.
Survey participants told CHOICE that trying to sort out travel cancellations and refunds had involved punishingly long waiting times on the phone and a wearying game of pass the buck: airlines, accommodation providers and other travel businesses tell customers to take it up with their travel agent or third-party booking site, who then send customers back to where they started.
In many cases, it wasn't clear who had the money – the travel provider or the booking agent, and they often seemed to be battling it out between themselves, leaving customers in the dark.
One grounded traveller who is trying to recover $2400, said, "I was told by Expedia that it was a Virgin issue, and told by Virgin it was an Expedia issue." Another said, "The parties involved are just making us go back and forth between them. This has been happening for almost a year."
More than eight in 10 (86%) of the cancellations the survey respondents reported were for flights, and many said that trying to get their airfare back has been a fruitless exercise. The next most cancelled service was accommodation, at 65%.
Although more than one in four (27%) of survey respondents did receive some of their money back, 25% were only offered a credit or voucher, or just a voucher. Sometimes the partial refunds were very partial indeed, with travel providers keeping as much as half of the money customers had paid.
Many credit and voucher recipients were worried they would not be able to travel again before the credit or voucher expired.
CHOICE is calling on governments to implement:
- Easier travel refunds.
- Minimum voucher/credit rights.
- A mandatory industry code for all airlines and large travel providers.
- A travel and tourism industry ombudsman.
- A mandatory information standard at time of booking.
- An ACCC market study into the travel and tourism sector.
- A national travel restrictions website.
CHOICE has advice about what to do before you book a holiday here. Obtaining refunds and credits is time-consuming, complex and often frustrating for travellers, with the suppliers’ Terms and Conditions determining whether a credit or refund is available.
CHOICE concedes agents have been providing support to consumers despite agents experiencing revenue falls of 90%-plus from the imposition of the international travel ban in March 2020.
Industry bodies such as the Australian Federation of Travel Agents (AFTA) and the Council of Australian Tour Operators (CATO) say they were not asked to participate in or provide feedback to the CHOICE survey.
The full AFTA response can be read here. In essence, the Federation says travel agents have so far successfully secured $7 billion worth of credits and refunds for COVID-impacted travel from hotels, airlines, tour operators, cruise liners and other suppliers on behalf of their clients with an estimated $3 Billion (the majority of which is now in credits) still outstanding.
CATO’s full response can be read here. Managing Director, Brett Jardine said if CHOICE was serious about participating in industry reform, it would be more productive for them to engage with the travel industry from the outset to ensure a clear understanding of the complexities involved.
“This approach would have been of greater value to consumers in helping them to understand, rather than launching a survey that is more likely to inflame consumer angst. CATO continues to welcome this approach,” he said.
Before COVID, more than 80% of our travel business was international travel. Vacation and packages monies are not held by our travel agency and have been paid to overseas suppliers such as hotels, cruise lines, tour companies, and ground operators.
Our travel team has worked tirelessly to refund or obtain credits from these suppliers for our clients. To date we have processed upwards of $3 million.
Processing of claims is progressing globally taking into account the business sustainability of the travel industry and avoiding the collapse of travel businesses, which would mean significant out of pocket losses for customers.
Our team is made up of highly experienced professionals and our relationships with our travel suppliers and partners have been a point of difference and advantage for our clients.
Negotiating refunds and credits is a complex process, which has been exacerbated by suppliers working on reduced staff and processing unprecedented levels of refund and credit requests.
We believe there needs to be a standard set of Terms and Conditions for travel bookings across all travel suppliers. Whilst that can be achievable in Australia, how it could be enforced internationally remains to be seen.
In contrast to the CHOICE survey, we have never advised our clients to deal with the suppliers of their holiday directly to obtain their refunds or credits. Our role is to facilitate and provide professional guidance.
Having said that, if a client asks to deal directly with a supplier, we provide contact points and at all times stand ready to assist.