Need to know
- Fewer than one in five (17%) of our survey-takers got a full refund, and it often took many months
- Many consumer who’ve received credits or vouchers say they’re unlikely to be able to use them
- Nine out of 10 respondents say Australia’s laws should be changed to make it easier to get your money back
In a COVID-19 travel cancellations survey we ran in March 2021, 3865 of the 4295 people who responded to the question (90%) say the law should be changed in Australia to make it easier to get a refund.
Which is not surprising, considering that, of 4060 survey-takers, fewer than one in five (17%) say they got a full refund after their travel plans were cancelled.
For many people we heard from, 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.
Our survey shows many Australians have lost trust in the travel industry.
Pandemic impact: ‘Unprecedented and complex’
It’s been an extraordinary time in the travel industry. Australia’s market regulator, the ACCC, 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”.
Travel providers have been unacceptably slow
Even with the fallout from the pandemic, our survey indicates that many players in the travel industry – who provide flights, accommodation, car hire, cruises and other services – have been unacceptably slow to respond to customers’ efforts to get their money back, if they responded at all.
Over half of the people we surveyed (53%) say they waited more than three months for a refund, credit or some other resolution.
Australian travellers aren’t happy about travel businesses holding on to their money for so long
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.
And although eight in 10 (83%) say they bought travel insurance before the pandemic hit Australia, the cover didn’t pay off for many travellers.
There are several variables at play, but our survey results deliver a clear message: many Australians have simply lost trust in the travel industry.
Travel providers passing the buck
Trying to sort out travel cancellations and refunds has often 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 to 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.
Trying to sort out cancellations and refunds can mean long waiting times on the phone and a wearying game of pass the buck.
Grounded travellers find refund process ‘difficult and frustrating’
One grounded traveller who is trying to recover $2400, says, “I was told by Expedia that it was a Virgin issue, and told by Virgin it was an Expedia issue.”
Another says, “The parties involved are just making us go back and forth between them. This has been happening for almost a year.”
Along with Expedia, third-party booking sites such as Webjet, APT and Flight Centre came under criticism.
“Flight Centre made the entire process an exceedingly difficult and frustrating one,” one respondent tells us. “When they actually responded to calls or emails, staff frequently gave inconsistent or incorrect information.”
Another disaffected traveller says Webjet was “absolutely horrible to deal with”.
In many cases, it wasn’t clear who had the money – the travel provider or the booking agent
“APT has our money and we have nothing,” says another. “They should refund our deposit in our view, but the fine print says it’s in credit for three years. They would argue we haven’t lost anything, which is true. It’s just that APT has our money for up to three years.”
Ts and Cs, but no guarantees
Some customers who didn’t pay off the balance by the deadline – for fear of a cancellation – ended up losing their deposits, even when the trip was ultimately cancelled.
For customers of businesses such as Virgin Australia and STA Travel, both of which went into administration in 2020, the back and forth was that much worse. (Virgin is now back in business.)
And although the terms and conditions of a travel agreement dictate what should happen when you request a refund, travel providers appear not to have honoured their own Ts and Cs, or even updated them after the fact in some cases.
Flights and accommodation top list for cancellation
More than eight in 10 (86%) of the cancellations our survey respondents reported were for flights, and many have said that trying to get their airfare back has been a fruitless exercise. The next most cancelled service was accommodation, at 65%.
One Air Asia customer tells us the process had been “a nightmare”, saying: “They were offering credits and not refunds, which I had to just accept. But now, trying to view my credit balance, the tab doesn’t work and I am emailing them and the issue is not resolved. I fear that I have lost the cost of the flights and there is no one I can complain to to resolve this. I want to ask for a full refund now, but I can’t when no one speaks to you.”
Many credit and voucher recipients are worried they won’t be able to travel again before the credit or voucher expires
Australia’s most popular airline also came in for its share of criticism.
“Qantas seemed to go out of its way to make things difficult,” one respondent tells us. “They deliberately limited the means by which customers could communicate with them. The chat option was removed from their webpage, as was a general email address. Phone calls were impossible as wait times were in excess of two hours, after which we were cut off more than once.”
‘My credit will expire before I can use it’
Although more than one in four (27%) of our survey respondents did get 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.
To make matters worse, many credit and voucher recipients are worried they won’t be able to travel again before the credit or voucher expires.
“Club Med owns the airfare and accommodation bookings,” says one survey respondent. “They will only deal with the travel agency that made the booking on our behalf and will not speak or correspond with us. Club Med will charge 50% of our total cost if we choose to cancel. Our money is tied up with them in credit and a new booking – that we may or may not be able to use – that must be made by October this year.”
Some would be travellers are being offered credit instead of refunds, but say they won’t be able to use it.
‘It is unlikely that I will book another cruise’
Another respondent got a refund of $146 from the cruise line operator RCI, but the business held on to $550 “for any travel needs I may have in the next 12 months”. The respondent also got a future cruise credit of $800 from Celebrity Cruises, but thinks it will probably come to naught. “It is unlikely that I will book another cruise as I am now in my 80th year and I feel that cruises are not the healthiest or safest type of travel for me,” the respondent says.
One respondent expresses the frustration of many: “The chance of me being able to use my credit before it expires is not going to happen, and I am absolutely filthy that I am expected to be grateful that I received anything at all. 6K down the drain and no one cares. Everyone is putting their hands in the air and no one will take responsibility. As I have not received what I paid for, I should be able to lodge a credit-card chargeback or claim on travel insurance, but both won’t allow it because of this stupid credit I can’t use.”
Travel insurance claims knocked back
Many travellers who took out travel insurance had claims knocked back because of the pandemic (or ‘force majeure’) or insolvency exclusions in their policies. Some found out they’d be getting nothing only after they’d lodged a claim.
“Although I know it’s in the fine print, there are so many things in the fine print that sometimes I wonder what the point of travel insurance is,” one respondent says.
“We paid for gold level travel insurance, which cost us $3300, and they have been shocking to deal with, especially as our policy did not exclude pandemics,” another respondent says.
6K down the drain and no one cares. Everyone is putting their hands in the air and no one will take responsibility
Some travel insurance customers were denied claims on the grounds of the pandemic being a ‘known event’, even though COVID-19 had just begun to appear in China and had not yet arrived in Australia when they took out the cover.
“Apparently we had taken out insurance after it was a ‘known event’, but we had not been alerted to the exclusion of any claim relating to COVID when we purchased the policy, and we argued that there had been no explicit flag prior to purchase to warn us of that,” one travel insurance customer tells us. The argument got them nowhere.
And although some insurers refunded part of the premium when claims were refused, others did not.
Industry displays ‘lack of good will’
One survey respondent deftly sums up the sentiment that runs throughout the thousands of stories consumers shared with us.
“I cannot understand how a business can be within its rights to take money for a service it cannot deliver. There is no other business I know of that would be allowed to do that within the law. These businesses have now had access to our money for years and we feel they should not only be refunding the funds but doing so with interest rather than taking fees. We feel the industry has done a lot of harm to itself through the lack of good will.”
What CHOICE wants
CHOICE is calling for the federal and state 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.