The travel closure has exposed the delicate balance of the travel ecosystem, with many providers struggling or simply refusing to offer refunds to customers on trips that companies have been forced to cancel.
While large and long-established tour operators such as Collette, Tauck and Globus say they are complying with requests for refunds from customers whose tours have been canceled, many small operators say they have not been able to because the money paid by the clients have often already been canceled. paid to suppliers and partners.
Others, like G Adventures, say they simply stick to their long-standing policies of offering nothing but future credits on canceled trips, because that not only helps them and their advisors keep clients through changes of reserve, but also supports the global supply chain. who, like everyone else, is suffering.
“Local communities are really struggling with this,” said Ben Perlo, managing director of US operations for G, a small-group adventure travel company that was founded with a strong social mission of sustainable travel and country support. Developing.
By sticking to its credit-only policy, he said, “our hope … is that we can get travelers to travel to those places again, to get back to what was our original mission: the redistribution of wealth.”
As with commission payments, many companies have modified their refund policies as the shutdown has dragged on. Others have stopped announcing blanket cancellation dates, as their policies require them to make refunds only on trips they cancel.
Confusion around different and sometimes changing policies led ASTA last month to call providers to offer full refunds.
But a recent survey by WeTravel, which processes payments for some 3,000 tour operators and their partners around the world, showed that meeting such demand is difficult.
Nearly half of the 592 respondents, mostly multi-day operators with fewer than 20 employees, said they have managed to give full refunds to their travelers, while 27% wait for refunds from their suppliers first.
At the same time, only 39% of providers said they were willing to grant full refunds to tour operators, while 11% of providers were unwilling to refund at all or even reschedule.
“The general theme is [operators] they want to give refunds, but unfortunately, many of them just don’t have the money, “said Lucas Ennis, WeTravel’s head of sales.” Not because they have spent it on their staff, but because they have given it to different partners. “
While companies have emphasized that future travel credits (FTCs) help agents keep commissions, travel consultant Tom Baker, president of the Cruise Center in Houston, said such policies are puzzling.
“What initially started as a refund or future travel credits, almost all tour operators have transferred to the FTC and received no refunds, leading us to believe that they do not have the cash assets to begin repaying that much money. , which is terrifying in itself, “he said. “I am concerned about the viability of anyone at the moment. There are too many things we don’t know. I advocate for any customer who can accept the refund. I am honest and I say, ‘Think about your money.'”
However, Hicham Mhammedi Alaoui, CEO and owner of luxury destination management company Experience Morocco, said the advisors have been some of the biggest advocates for its credit-versus-repayment policies.
“We may have been lucky, but most of the agents we work with have been very understanding,” he said. “The whole industry is rallying around this postpone, don’t cancel message.”
He explained that most relationships in the travel space are based on advance payments. Once travelers commit to a trip, he said, most of their money is paid up front to hotels, guides and other local vendors.
“We are confident that all of our suppliers will be present,” he said. “So, effectively, the money is not lost, it is only with our partners to be used every time you travel.”
Perlo from G Adventures said transparency, communication and consistency were key.
“My worst nightmare … is coming out with a policy and then backing it off,” he said, adding that G has “gotten a lot of positive comments” about his opening.
Still, the larger, long-established carriers say they have complied and will always honor requests for full refund on trips they are forced to cancel, regardless of whether customers have purchased insurance.
At Collette, for example, Executive Vice President Jeff Roy said that while the company encourages customers to rebook rather than cancel by offering a 105% credit, when a customer wants a refund, they return all of their cash without spending any penalty by airlines. or other providers.
“We’ve been in business for 102 years,” he said, adding that after 9/11, Collette made more than $ 30 million in rebates, and “this is so much bigger.”
“The bottom line is that we try to put the customer at the center of everything here,” Roy said. “We try to take care of our customers first, then we negotiate with our partners to complete us.
Tauck and Globus also adhere to their refund policies, while offering incentives to rebook.
“Our goal has been to offer options for any departure we suspend that includes a refund or the ability to move the original reservation on any other date or the Globus family of brands product through our Peace of Mind letter of credit and bonus for Change of reservation”. said Steve Born, vice president of marketing for Globus. “And when you go for the Peace of Mind option, we pay a commission up front.
“The other thing that is in high demand right now is time,” Born added. “With each movement in the status of our operations, we have created a communication path and a time window of three full weeks to activate the option. And moving forward, our goal is to anticipate the next final payment dates with decisions about future operations. exit. “
Tauck said that in cases where it has canceled a trip, it will grant refunds, but is encouraging guests to transfer their funds to a Tauck travel wallet for future use by providing an additional credit of $ 500 per traveler for reservations that are paid in full. or $ 250 per traveler for reservations under deposit.
Tauck Travel Wallet funds never expire, while credits can be applied to any 2020 or 2021 Tauck cruise or land tour.
“The Tauck Travel Wallet program has been very popular with our travel consultants, because it provides a strong incentive for their Tauck customers to travel with us once they are able to do so,” said company spokesman Tom Armstrong.
News editor Johanna Jainchill contributed to this report.