Coronavirus is hitting all elements of society very hard and the travel sector has been very heavily impacted. In fact for almost all agents and tour wholesalers, booking volumes have fallen to zero meaning no revenue is being earned. Despite that travel agents are busier than ever re-arranging future travel plans for their clients and, in many cases, working 15 to 20 hour days getting clients home who have been caught up in border restrictions or closure. Agents are earning no fees for this service. They do it because they care about their clients.Some clients have asked why they can’t get a full refund of monies paid to their agent and are instead being offered a credit.
THERE ARE 3 REASONS FOR THIS:
1. We all want the product that we arranged for clients to be delivered. The best option for all involved is for travel arrangements to be postponed. This will ensure the industry can recover when the virus is under control and international travel gets back to normal. It should, in most cases, also result in a much better outcome for customers, as the obligations for suppliers to refund in the current environment may be validly limited by suppliers through their booking conditions or general legal principles. 2. Agents are also unable to refund as we do not have those funds in the business - they have been paid out to suppliers like hotels, airlines and land operators up to 6 months or 12 months earlier.Our suppliers are not refunding because they would have likely also incurred expenses, and may not have a legal obligation to refund where travel is cancelled due to unexpected and extraordinary events outside of their control. You may hear suppliers talk about Coronavirus being an ‘event of force majeure’, which basically means that the performance of their contractual obligations is impossible due to current events associated with the pandemic – i.e, border closures.We are aware that many suppliers have agreed to issued credits for future travel – by offering credits, suppliers could in fact be offering customers more than they are legally obliged to offer. We also hear that they want to supply their service at a later date and ensure the industry’s long term survival. Mass refunds will call ‘cause’ mass business failure and significant job losses. 3. Agents are not in a position to refund commissions. Commissions are paid by suppliers not customers, (which are generally earned up to three months prior to departure) have already been spent on salaries, superannuation, rent, insurance, lighting and all the other expenses that go into running the business. If you are acting as a retail agent for suppliers, remember that customers have not paid you any fees or any payments for travel arrangements where you are not the principal supplier.You are merely the retail agent for the supplier, and the customer’s contract for travel arrangements is with the supplier, not you. Your obligations are limited to arranging for the customer to contract with the supplier as an intermediary agent only. Your commission is paid by the supplier. If a supplier offers a credit, then note this in line with the latest guidance from the Australian Competition and Consumer Commission (ACCC) .
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