You wouldn't ask a lawyer for a refund for work they've already done. So why should we expect the same for travel agents, asks Juliette Sivertsen.
Imagine having to give back your last four months' earnings. You completed the work to a high standard, and the income for that work had already been allocated or used to pay those four months of expenses. You still continue to work beyond the call of duty but now you have to hand back your income, with no new money coming in and no guarantee you will still have a job going forward.
It might sound like a bad business plan, but this is the current reality for travel agents all over the world.
Agents and suppliers have been bearing the brunt of frustrated customers who have saved hard for a trip, only for it to be cancelled because of Covid-19. Some customers are choosing to hold their trip funds in credit to use at a later date, whereas others have opted for a refund - two very reasonable options and customers are entitled to whatever option suits them best.
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But some consumers who have opted for a refund, are unhappy they have to pay a cancellation fee, when the situation was so far out of their control. Last week, Flight Centre buckled under public pressure and announced they would drop the refund fee, after a Change.Org petition to get the agency to relax or waive fees, attracted thousands of signatures.
"We have listened to feedback - both positive and negative - and made a further amendment to our refund policy to address one of the key ongoing concerns - our cancellation processing fee," said managing director David Coombes at the time.
But in doing so, has this devalued the work of travel agents?
In the month of March, Michelle Malcolm's travel agency, Quay Travel, on Auckland's North Shore, lost the income of the previous four months of work, and all future income disappeared in a flash as international travel ground to a halt. Suppliers have also been recalling agents' commissions, even though the work had already been done to complete a booking.
"But in four months, I've still had to pay all my salaries, my lease, my power, my marketing costs," says Malcolm. "Just understand that this industry has been absolutely crushed and we're just trying to do the best we can for our customers."
It's not just a case of losing money for work that has been completed - the work hasn't stopped, as clients continue to change or cancel bookings. Most travel agents and wholesale agents have been rushed off their feet as a result of Covid-19, but working without any more cash flow, while also dealing with the anxiety of not knowing if they'll have a job at the end of it.
During the initial international border lockdowns, Malcolm, like many agents, was up in the middle of the night trying to repatriate customers, as well as dealing with the flurry of clients panicking and cancelling their future bookings. Of course, each new day would bring a new cancellation or refund policy, or incentive policy, from all suppliers involved in the itinerary.
For example, cancelling one cruise booking would mean dealing with policies not just from the cruise line, but also the airline, transport and accommodation suppliers. Then the next day, all the policies would change. And that's just for one booking, for one client, using one set of suppliers.
"We are trying to do the best by [our customers], but trying to get that information and that accurate information out of airlines, cruise suppliers, our wholesale companies, is really, really frustrating, because it does change," says Malcolm. And refunds take time to come through, as each supplier processes an unprecedented level of cancellations.
With that in mind, Malcolm believes dropping cancellation fees altogether devalues the work that she does.
"Am I allowed to go to my accountant and say, 'My 31 March year-end results - can you just not charge me for that work, because I'm really hurting as a travel agency?' It's not how it works, so why should our industry, as a professional services industry, not be able to charge for our time?"
Malcolm says all they want to do is charge a fair amount for the time they're putting in to help out customers. Cancellation fees don't apply to customers who choose to hold their booking in credit.
Andrew Olsen, the CEO of Travel Agents Association of NZ (TAANZ), says it's understandably an emotive time, especially for customers who've saved hard for a trip that's no longer going ahead, but are still faced with fees. But he says the extra workload and loss of income as a result of Covid-19 is taking a toll on many agencies and their staff.
"They're not only working hard and working in difficult situations - certainly remotely and probably dealing with family around that - but they're also dealing with in most cases a repeat customer's testiness, or despair, or desperation - take your pick - and that washes back over one person dealing with an army of people feeling the same way."
Olsen says representatives are managing the situation the best they can, in line with the contracts they formed with their customers. "They're not clipping the ticket all the way along." He says there are so many moving pieces, with constantly changing policies.
"It's like a Rubix cube, where all the tiles are white. Every answer is right, but you don't really solve anything, you just keep moving things around. Until there is a sense some decision is made by the customer that they're happy with an outcome."
Olsen says he wants consumers to know that there's no additional remuneration for all the extra work being done behind the scenes. "And agents aren't looking to be grubby about this. All they're saying is that a reasonable fee for reasonable work performed is not a bad thing. They're not trying to change the contract terms."
Contracts are usually signed between the agent and consumer at the time of confirming a booking. The Commerce Commission issued guidelines regarding travel disruptions as a result of Covid 19. It reiterates that the main factor that will determine each party's rights or obligations will be the terms and conditions that were agreed to at the time of the booking or transaction.
"In general, a consumer's legal entitlement to a refund or credit when travel or an event cannot take place will be determined by the terms and conditions of their ticket or booking. Some contracts will provide rights to a refund; others may state that a credit will be provided, allowing the consumer to rebook at a later date, or allowing an event to be held at another time. Contracts for the supply of goods or services may also explain what happens when the goods or services can not be provided as planned."
helloworld Travel's marketing manager, David Libeau, says its teams have been working tirelessly to help customers with refunds, bookings and cancellations. He says agents provide a 24/7 duty of care, so if something goes wrong at any time of the day or night, they are working to help resolve the situation.
"Due to constantly changing policies from many of our supplier partners, including airlines, cruise lines and tour companies, our travel agents have often had to deal with multiple changes to customer files and a huge amount of workload, much of which is done for very small service fees," says Libeau.
"The advantage of booking through a professional travel agent versus booking online has really been highlighted through this pandemic crisis with many of our travel professionals and staff working seven days a week to ensure that their clients' needs are satisfied.
"At the same time they have to manage clients' expectations, where the agent is trying to recover refunds or future use credits from our supplier partners."
However, Libeau, Malcolm and Olsen all agree the majority of customers have been understanding, if not extremely generous. Some clients have asked their agents how much commission they would have made on a trip that had to be cancelled, and offered to pay it regardless.
"Customers have willingly offered to provide agents with more income for the work provided, because they don't think they've been charged enough," says Olsen.
Libeau is also optimistic about maintaining client relations. "Our business owners and travel agents have been inundated with praise from their customers and we are confident that when the time is right for people to book and travel again we will not only see strong support from our existing customers but also an upswing from new customers who perhaps previously booked some or all of their travel online."
Malcolm says these examples demonstrate the power of the relationship between agents and their customers.
"A lot of clients are totally happy to pay a reasonable cancellation fee. And I'm talking about a $100 or $200 cancellation fee for a booking. I think that's reasonable for the amount of time to unwind it." She says the whole coronavirus experience may change the way agents charge for their services and behind-the-scenes research to help safeguard them in future.
"Maybe it's time for us as an industry to grow some balls, and charge for that time. Because it's going to be needed, for the next few years when there's all these new rules and border controls."