Why getting a refund for your holiday is so hard amid the coronavirus pandemic
On March 17, the government advised against all non-essential travel overseas for the time being, hundreds of thousands of holidays had to be cancelled.
Some holidaymakers are naturally looking for refunds but are finding that their hopes for getting a timely refund from companies are as dashed as their cancelled holiday plans.
Holidaymakers are entitled to a refund for their cancelled holiday – no question – including because of travel restrictions. Any advice to the contrary is false and you can insist on a refund. Any holiday company that refuses to give a refund for a cancelled holiday is breaking the law.
A holiday company that refuses to give you a refund for a holiday cancelled due to the coronavirus outbreak is breaking the law.
Typically a refund for a cancelled holiday has to be given, by law, within a fortnight. But these are not typical times.
The sheer weight of pressure this has placed on travel companies is sometimes more than burdensome and finding the financial resources to give refunds within two weeks will ultimately lead to some travel firms having to pack up shop.
Why are travel companies struggling to pay refunds?
On the whole, travel companies would like to comply but many are cash-strapped as they themselves are waiting for refunds from hotels and other services bought on your behalf for holidays during March, April and May.
So, they are looking at other options. One option is to offer holidaymakers a travel voucher or refund credit note in a bid to stave off bankruptcy.
According to Massimo Valentini who runs villa rental company Puglia Paradise it’s hard to keep up with the high levels of cancellations causing severe problems for the company. He said:
Since we started receiving cancellation due to covid-19, I decided, in the first instance, to offer the maximum flexibility to our guests, offering several options they could choose from postponing balance payments to offering a voucher worth 10 per cent more than the original rental, to be used for villa rentals any time to December 31 2021. If this was acceptable, it would mean we could get through this period without severe damage to the business.
“I understand that for some – where the booking was made by a family who are struggling with financial problems due to covid-19 – nothing less than a refund would work for them.”
Sarah Bradley, Managing Director of Journey Latin America who has cancelled all departures until 24 May and future departures reviewed on a daily basis, said “
These are clearly very challenging times for everyone. Our team are speaking to all our clients personally, helping find the right solution on an individual basis. We are delighted that so many of our customers have already been able to reschedule their holiday for a later date, giving them something to look forward to. Understandably, not everyone is able to make alternative plans at this time; where postponing is not an option, we have been happy to issue a refund and hope that customers will consider travelling with us again in the future.”
In the meantime, ABTA, the British the travel trade association have asked the government to extend the amount of time they can give a refund to be extended to 4 months. So far this has not been granted.
The ABTA chief executive, Mark Tanzer said:
“The global pandemic has put an enormous financial strain on tour operators and travel agents, with businesses seeing a collapse in sales while facing immediate repatriation costs and refund demands for cancelled holidays on a scale that is unmanageable.
“Existing regulations are entirely unsuited to deal with this situation. These businesses are themselves waiting for refunds from hotels and airlines”.
Understandably holidaymakers who are now both out of pocket and without the holiday they were looking forward to are left feeling disgruntled.
Sarah Jane, who was looking forward to a family holiday in France, feels that travel companies should refund promptly as “my family and I have been put out enough. A voucher simply does not work.”
But let’s face it, neither does a bankrupt travel company.
Perhaps holidaymakers whose circumstances allow could consider waiting a few weeks to allow the travel company to stay in business long enough to make the refund.
It is worth noting that ABTA says that a refund credit note or voucher, is financially protected in the event the travel business fails. However, there is no official word from the government as to the protection credit notes offer.
What is a Refund Credit Note?
A Refund Credit Note is a voucher that can be used to book another holiday with the same company at a later date – or, crucially, redeemed for cash at a certain later date. Think of it as an I.O.U.
ABTA says this should be 31 July 2020. The Refund Credit Note is protected by ATOL (or, for non-air holidays, ABTA), so long as it is drafted correctly.
To be drafted correctly it must expressly identify the original booking reference and attach a copy of the cancelled booking confirmation/cancellation invoice and, where appropriate, ATOL certificate.
Are any travel companies offering refunds?
All companies should offer and pay out refunds. Some are doing it within the 14-day deadline including Easyjet, Booking.com, Journey Latin America, Trailfinders, Kuoni, Global Travel Group, Travel Republic, Travelbag, Netflights, Sunmaster brands. Ffestiniog Travel and Vivid Travel.
Vivid Travel owner Kane Pirie is a firm believer in providing a refund over a voucher when a refund is asked for. He says:
“We all recognise tour operators will need more than 14 days to put the finance in place and process the refunds but it makes my blood boil to see some leading companies try to hoodwink customers into trading their 100% protected right of refund under their original ATOL certificate for a flaky voucher, which never converts to cash.
“They are just trying it on and hoping customers don’t cry foul. It’s a straight red card offence and the guilty tour operators know full well what they are doing.”
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