This story originally ran in the April 2, 2020 issue of Travelweek magazine. To get Travelweek delivered to your agency for free, subscribe here.
TORONTO — Financial concerns are mounting. Work and stress levels are at all-time highs. The retail travel sector is facing never-before-seen challenges amid the coronavirus pandemic. And unbelievably this has all come to a head in just a few short weeks.
Not surprising then that the last thing any travel agent wants to hear from a client right now is ‘forget the voucher, I want a refund’.
Thankfully unprecedented times call for unprecedented measures and in recent days both the Canadian Transportation Agency (CTA) and the Ontario government have come out with new directives in favour of vouchers / future travel credits, aimed at mitigating the impact of the hundreds of thousands of cancellations brought on by the coronavirus pandemic.
Travel agents understand that clients want refunds. They also understand that if suppliers and retailers are on the hook for refunds amid a global health crisis, with all of the worldwide border closures and travel restrictions that have followed in its wake, then an entire industry will be on the brink of collapse.
Some say travel advisors who have been in the habit of taking the client’s side in any dispute with a supplier may have to think twice before doing that this time, adding that there’s a fine line to be walked, between client and supplier, if the advisor’s relationship with both is to survive this pandemic.
Agents facing a financial hit with commission recalls or worse when clients pursue refunds or credit card chargebacks say they’re using every skill at their disposal, from tact to tough talk, to deal with refund requests.
“SUPPLIERS HAVE BEEN VERY GENEROUS, ESPECIALLY THE CRUISE LINES”
Uniglobe Travel’s Michelle Whalen knows first-hand the disappointment of missing out on a trip. Her own anniversary cruise was cancelled amid the coronavirus pandemic. “I see all these suppliers and their staff layoffs and partners I’ve come to have a good rapport with, they will lose their jobs. The Caribbean countries who rely on tourism dollars. My heart goes out to them. I’m not in any way going to demand a refund.”
Whalen says most of her clients are willing to accept vouchers and even happier when they saw that some suppliers were extending the expiry date to up to 24 months. “Many of my clients are keen travellers and will be travelling again at some point. Suppliers have been very generous, especially the cruise lines.”
The downside of the vouchers is that the pricing, itinerary and availability “may not be as desirable” as when clients first booked. Explaining the situation to a client, Whalen says: “I gently said I know it’s disappointing you’re not getting the same trip next time at the same price but they are being flexible, they’re offering a 10% bonus.”
Whalen adds: “I explained that [suppliers] can’t possibly refund everyone’s money at once or the companies would be bankrupt making future travel even more difficult. I’ve tried to highlight to clients that it’s not about the almighty dollar – these suppliers really do care about helping people.”
“Airline staff, tour operator staff are experiencing layoffs just like my clients’ workplaces – they have bills to pay, families to feed as well.”
“NONE CONTEMPLATED THE WORLDWIDE MASS FLIGHT CANCELLATIONS”
The small but vocal minority of travellers pursuing refunds has made its case for refunds in consumer media and Facebook groups. Earlier this week came word of a class action suit against airlines including Air Canada, WestJet, Swoop, Sunwing and Transat.
On March 25 the Canadian Transportation Agency waded into the fray, issuing a special statement saying that while specific cases may get further analysis, in general, vouchers are appropriate in these extraordinary circumstances.
The CTA added that legislation, regulations, and tariffs currently on the books “were developed in anticipation of relatively localized and short-term disruptions. None contemplated the sorts of worldwide mass flight cancellations that have taken place over recent weeks as a result of the pandemic.”
Striking a fair and sensible balance between passenger protection and airlines’ operational realities is key, said the CTA.
COMP FUND IS STILL OUT OF DATE AND INADEQUATE: ACTA
This week in Ontario the provincial government announced a number of regulatory amendments to the Travel Industry Act, 2002. In addition to measures aimed at reducing the burden on TICO registrants, the updates include a time-limited exemption that would allow registrants to choose to provide only a voucher in cases where a supplier failed to provide travel services. Also new, eligibility for Comp Fund reimbursements will be expanded to cover consumers with vouchers who do not receive their travel services, potentially due to the failure of a registrant.
ACTA applauded the moves, while cautioning that the funding model for the Comp Fund is still out of date and inadequate. “The COVID-19 pandemic has highlighted the vulnerability of the significantly inadequate Fund, and as such, ACTA will continue to lobby for recommended changes for the benefit of Ontario travel agencies, and the consumers they represent,” says ACTA President Wendy Paradis.
“IT IS NOT POSSIBLE FOR OUR SUPPLIERS TO ABSORB THESE LOSSES”
Tripcentral.ca President Richard Vanderlubbe says: “While it is understandable that customers are expecting refunds, and from a ‘moral’ point of view, they have paid for something that they have not received, this is not how the global travel industry functions.”
Vanderlubbe, who served on the TICO board for many years and who is a long-time advocate for modernizing the Comp Fund, adds: “It is not possible for our suppliers to absorb these losses, and if they were required to provide refunds, it would bankrupt most of them. Bankrupt suppliers will cause cascading losses for travel agencies due to non-payment of outstanding commissions, and damage future travel plans on the books. Further, bankruptcies will hurt us all by reducing consumer confidence.”
For this reason, he says, “we support suppliers policies of future travel credit, and point out that the federal government, TICO and others are supporting. The best thing for our customers and the industry is that all of our businesses remain solvent.”
“YOU HAD THE OPPORTUNITY TO PURCHASE CANCELLATION INSURANCE … AND YOU DECLINED TO DO SO”
A letter that Vanderlubbe and his team have ready for any client making persistent refund requests or launching credit card chargebacks is strongly worded but fair, and explains the situation from the retailer’s side. The letter cites the CTA statement and reads, in part: “We too are experiencing financial damage from the COVID19 pandemic, paying our staff for more than 5 weeks now with little or no revenue coming, in order to help our customers return home, process future travel credits, and we will be re-booking for months later.”
The letter also notes: “The Federal Government has issued a plain language statement which you can read from the link below [https://otc-cta.gc.ca/eng/statement-vouchers] that states that, as far as the air travellers protection regime goes, it was never intended to cover acts of God, or a force majeure situation. In short, they state that a future travel credit for 2 years is sufficient compensation under this circumstance.
“Further, the Travel Industry Council of Ontario, that administers the Ontario Travel Industry Act, has issued a statement that ‘under Ontario law, there is no requirement for a travel company to refund or offer alternative travel services if a government travel advisory is in effect’. In short, our suppliers are not even obligated to provide a future travel credit, but they are.
“Your chargeback through your credit card is unreasonable given that you are being offered a travel credit good for two years, and that you had the opportunity to purchase cancellation insurance at the time of booking, and you declined to do so.
“We ask that you contact your credit card company and ‘reverse the chargeback request’. We need evidence of this in order to process your future travel credit.”
TICO has issued a FAQ for consumers inquiring about voucher use, a FAQ that’s helpful for retailer and supplier registrants as well. The FAQ can be found at TICO’s website at tico.ca.