Lack of regulation around cancellation and refund policies is putting off travel’s recovery

Talk to anyone who loves travel about the last 18 months in Australia and they’ll have a story. The borders that closed at just the wrong time. The flights that had to be cancelled. The hotel rooms that needed rebooking. The hire car that never left the garage.

Plenty will tell you, too, that they lost money on those aborted plans. A lot of money. Some will have given up hope of ever getting their refund. Some will still be fighting. Some will be staring at credits and wondering what they’re supposed to do with them.

The COVID-19 pandemic has been a nightmare for anyone involved in the travel industry. So many people lost their entire livelihoods in the space of a few weeks. Businesses lost their revenue streams. Professionals lost their careers. And consumers lost their money, in some cases never to see it again.

They also realised that in most cases, there’s no recourse. It’s just too bad.

There are very few government protections in place for travellers in Australia. No company has to give you a refund in the age of COVID-19, despite disruptions out of everyone’s control. No one has to be particularly clear about their cancellation policy, or provide you with credits that are simple to use and worth 100 per cent of what you already spent.

Australia is desperate to get domestic travel going again, particularly with summer holidays coming up. The country needs people to travel to buoy an industry that is still struggling with no inbound international tourism. But we have a problem: no one is going to book a holiday if they think they’re going to lose money on it. And right now, a lot of people think they’re going to lose money.

Consumer advocacy group Choice has been onto this for a while now. Back in July the consumer watchdog surveyed more than 4000 Australian travellers who had to cancel plans due to the COVID-19 pandemic and found that more than half had had to wait more than six months to get a refund, a travel voucher or some other resolution.

There were consistent issues in those disputes, too: lengthy call-waiting times while trying to contact businesses; slow responses once they did make contact; unexpected cancellation fees; vouchers or credits with such short expiry periods that travellers were concerned they would never be able to use them.

Those issues remain, clearly, because last month Choice surveyed more than 1000 Australians and found that 66 per cent of respondents were still not confident about booking travel. Ten per cent were unsure. Only 23 per cent said they were confident. That does not make for a travel rebound.

You can’t blame those people, either. Everyone has been burned, or at least expects that they might be. We’ve all heard the stories and seen the news. I would love to book a trip to Queensland to visit my family, but right now I have no real clue what’s going to happen in the next few months. The state should open to me, a NSW resident, in December; it has said it will. But state governments say a lot of things these days.

One of the key issues for travellers, aside from the shaky state of our borders, has been the lack of government protections for consumers. You’re on your own out there if something goes wrong.

Last week, something finally changed. The NSW government announced a minimum information standard to ensure travel providers make their cancellation policies immediately clear to consumers.

That’s great, but it’s only a small improvement, and it doesn’t do anything for those in other states. Those cancellation policies are still unregulated too. This change is not nearly enough to suddenly give confidence to those 77 per cent of travellers who are concerned about booking a holiday.

The Australian travel industry needs those people. Australia needs those people. This is a huge sector of the economy, and hundreds of thousands of people’s livelihoods depend on it.

Of course, you could say the travel industry only has itself to blame, given it is travel providers themselves who have been so opaque with their rules and so reticent to hand money back over the last few years. But there are a very few people actually making these decisions, and many, many more who have been affected.

Do governments need to do more? Yes. Probably. Back in July, Choice recommended a raft of changes that governments could introduce, including making it easier to get a refund, making travel credits fairer, lifting standards of consumer service, making it easier to get disputes heard, and having the ACCC conduct a market study into the travel and tourism sector.

None of those things have happened, and consumer confidence is way, way down. People want to travel, but they’re scared to make the commitment. Is it any surprise?

Have you lost money on travel bookings in the last 18 months? Has it been difficult to secure refunds or travel vouchers? Are you confident to book travel now? Will you travel in Australia or overseas?

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