A group of high school students who each paid a $3500 deposit for a once-in-a-lifetime history tour of Europe that was cancelled because of Covid-19 will only get $539 back.
The 20 Epsom Girls' Grammar School (EGGS) students in Auckland collectively paid a deposit of $70,000 to Student Horizons, a New Zealand and Australian travel agency specialising in student study tours abroad.
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But Student Horizons has a force majeure contract clause, freeing both parties of liability, and states all money paid is non-refundable, even in the event of unforeseen circumstances including epidemics.
A complaint has been lodged with the Commerce Commission. The total cost of the EGGS three-week history tour to London, France, Germany and Poland in July was $8820 per student, including the cost of four teachers, totalling around $176,000.
Year 11 history student Pippa Matheson decided to join the group of senior students last year.
Mum Kim Matheson said the 15-year-old spent her summer holiday working to raise money for what would be a $10,000 trip all up.
Matheson said she was disappointed so little of the deposit would be refunded, and that it would be staggered over six months.
"The girls are devastated and some families have been hit very hard.
"Many students and their families have been left significantly out of pocket and many students had fundraised themselves."
In a letter to the school on April 12 seen by the Weekend Herald, Student Horizons owner Jamie Wansey said they had already made payments to the airline, accommodation, excursion and transport providers.
"We also pay our Student Horizons staff for the work that has gone into the tour up until the point of cancellation."
Wansey said the 15 per cent refund was in line with 12 other schools the company was working with who had June and July departures.
He said Student Horizons was not contractually obligated to refund any money but felt "morally and ethically" it was.
He added that group travel booking terms and conditions usually came with more onerous cancellation fees.
The school had three options:
• A 20 per cent credit for the school to use later, but booking was required in the next few months.
• Postponement, but re-booking would cost up to 15 per cent extra.
• Or cancellation with a 15 per cent refund.
In a letter to parents on Tuesday, principal Lorraine Pound said the credit and postponement were not considered viable options by the school.
"I know that it is disappointing that the refund offered by SH is only 15 per cent," Pound wrote.
But she said with travel agencies across the sector facing closure the school needed to move with urgency to claim the offer with a view to securing more from Student Horizons later.
The school did not respond to several attempts by the Weekend Herald for comment.
In a letter Wansey wrote on Thursday, which he supplied to the Weekend Herald, he said Student Horizons had a team exclusively focused on recovering funds from suppliers for client tours.
He said the business, which organises up to 80 school trips a year, had reached a point where it could no longer ease its non-refundable terms as had been done for the April and July tours.
Student Horizons was now in "semi-hibernation" as the business tried to survive the "catastrophic" impact of Covid-19 on the travel and tourism sector.
He told the Weekend Herald in a statement: "We have longstanding robust partnerships with schools across New Zealand and we are working in consultation with each school to arrive at the best possible outcome in what are very difficult and challenging circumstances for everyone involved".
Student Horizons used the wage subsidy in New Zealand for six employees, receiving $42,177.
A Commerce Commission spokeswoman said it received a complaint about Student Horizons on Friday, which was being assessed.
She said the Commission had received 353 complaints about travel cancellations and refunds relating to Covid-19.
Under the commission's Covid-19 disrupted travel, events and trade guidance, when a contract is frustrated, the Contract and Commercial Law Act 2017 applies.
The CCL Act says the consumer is entitled to a refund, but the business may
retain its reasonable expenses and overheads incurred in relation to the contract.
Consumer NZ chief executive Jon Duffy agreed travel agents should retain part of the deposit to cover costs.
However, he recommended the agent be asked to justify the amount being retained.