Wednesday, November 25

Coronavirus and travel: Can you get a refund and how do flight and travel credits and vouchers work?

Although we are now banned from travelling out of Australia except for emergencies, many travellers now find ourselves on an unknown path through unfamiliar territory. Millions of Australians, myself included, have booked and paid for overseas travel in the next few months. Many of those trips are now cancelled, or questionable at least, and it’s proving hard to get straight answers from airlines and travel operators about where we stand.

Who do I talk to about cancelling or rearranging my travels?

Whether you’re delaying your travels or cancelling and looking for a refund you need to communicate with whoever you booked with. If it was flights, hotels or car hire booked through a travel agency or a third-party website such as Webjet or Expedia, contact them to change your booking, not the airline or travel operator who is providing the service.

Refunds, vouchers and cancellations

If your airline or tour operator cancels your trip you will most likely be offered a voucher or credit which will entitle you to take the same flight or tour at a later date. Qantas, for example, has now extended its flight credits to December 31, 2021. Any traveller holding a Qantas ticket for travel before 31 July 2020 is now entitled to a flight credit valid for travel before December 31, 2021. That includes flight credits issued on or after January 31, 2020, however flight credits must be requested by April 30, 2020.

Credits for future travel are the preferred option for airlines, hotels and tour operators, although some are offering a cash refund. After the Australian Government issued a ban on all overseas travel, Traveller readers Sue and Owen Armstrong were immediately offered a full refund by their carrier, British Airways.

The Armstrongs also had their accommodation rolled over to 2021 by the Royal Horseguards Hotel in London despite booking a non-changeable/non-refundable rate and their travel insurer, Covermore, postponed their policy to allow them to travel with insurance cover at a later date and no additional charge.

Such good luck stories are scarce. In most cases, travellers who cancel their trip and ask for a refund are being hit with cancellation charges, and those charges take a big bite out of your refund.

A travel credit or voucher might be for a service, such as a flight, or for a specific value, in which case you might end up having to make an additional payment. If you booked a low-season airfare at a cheap price and you use your airline travel voucher for a high-season flight you might be up for the additional cost. Similarly if you have a voucher for cancelled hotel accommodation, if the room rate has increased when you lock in your booking you could expect to be up for an additional charge.

Up to what date are operators cancelling trips?

There is no consistency among travel operators. Qantas and Jetstar have suspended all international flights until at least May 31, 2020. Carnival Cruise Line has suspended all Australian sailings departing up to and including June 15, 2020. Royal Caribbean is aiming to resume operations for most of its ships on May 12, 2020. Luxury cruise operator Seabourn has paused all sailings scheduled to depart before May 14, 2020.

See: Qantas drastically extends use-by on flight vouchers for cancellations

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The government of the United Arab Emirates suspended all flights starting from March 25th. That means no flights to and from Australia aboard either Emirates or Etihad, leaving Qatar Airlines as the only major Gulf State airline still operating. Emirates hopes to resume flights “as soon as feasible”, Etihad has a target date of April 8th “subject to further directives by the relevant authorities.”

Some of Australia’s biggest adventure travel operators are suspending all trips booked until the end of May. Travellers booked on trips scheduled to depart after that date will be advised of the status of their trip closer to departure date. In the case of World Expeditions and Intrepid, those who choose to postpone any trip booking departing later in the year will receive a full credit which can be applied to another trip. For those who cancel their booking, normal cancellation terms will apply.

“A lot of these target dates for resumption of normal service are unrealistic,” according to one industry source. “Travel operators are hoping that the COVID-19 crisis will be back in its box by late May or mid-year and people will have the confidence to start travelling again. It’s not clear how this is going to play out but with each passing day it’s becoming obvious that COVID-19 is going to impact on travel for months ahead, not just weeks.”

What does the Australian Competition and Consumer Commission say?

According to the ACCC website’s advice on travel cancellations due to COVID-19, “the ACCC expects refunds or other remedy such as a credit note or voucher will be offered in most circumstances. However, if the event, flight or travel service is cancelled due to government restrictions, consumer rights under the consumer guarantees may be impacted. In these situations consumers may be entitled to a refund under the terms and conditions of their ticket, or potentially may make a claim under a travel insurance policy.”

The same website quotes ACCC Chair Rod Sims, “Given the exceptional circumstances, the ACCC encourages all businesses to treat consumers fairly and compassionately”.

That gives travel operators plenty of wriggle room. It’s left to those operators to do the right thing by their clients without any legal compulsion to do so. Since they set the terms and conditions, to which assent is implied when you make a travel booking, the operator gets to decide the rules. In this regard our laws give Australian travellers far less consumer protection than their counterparts in North America and the EU.

If you had flights booked within the EU, or originating from an EU airport for a destination outside the zone and your flight is cancelled, EU rules stipulate that the traveller must be offered a refund or the option to reschedule their flight. Rescheduling is problematic with so many cancellations.

Ryanair, which carries more international passengers than any other airline, has grounded 90 per cent of its fleet, and the figure is similar for other low-cost carriers. But a refund is even more difficult, particularly with budget airlines. Getting a refund means getting in touch with the airlines’ customer service department and that’s a big ask at the moment. What you’ll most likely end up with is a travel credit.

What if my request for a refund for a hotel deposit is refused?

While most hotels are offering to postpone bookings for those who have paid and are forced to delay their travels due to the coronavirus, they might not offer a full refund to those looking to cancel. If you’re in that situation and if you paid with a credit card you might be able to claw back your deposit via a chargeback. Contact your credit card provider for details.

What about travel insurance?

If you bought a travel insurance policy before coronavirus became a “known” event, in late January 2020, you may be eligible to claim for any loss resulting from travel cancellations, but some insurers exclude claims arising from a pandemic such as the coronavirus.

Under its General Exclusions, Allianz Insurance’s Product Disclosure Statement says “We will not pay under any circumstances if… Your claim arises from, is related to or associated with an actual or likely epidemic or pandemic or the threat of an epidemic or pandemic.”

An exclusion also applies if “Your claim arises from, or is associated with, travel to countries….for which an advice or warning has been released by the Australian Government Department of Foreign Affairs and Trade or any other government or official body, and the advice or risk rating is ‘Reconsider your need to travel’ or ‘Do not travel'”.

Australia’s Department of Foreign Affairs and Trade applied a total ban on overseas travel commencing on 26 March.

See also: One empty plane: This is what rush hour in New Zealand currently looks like

See also: While others are grounded, one airline is increasing flights to Australia