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Couple slapped with $32,000 cancellation fee on $40,000 Canadian holiday

Published: (Updated: ) in Australian News by .

When Bruce Grocock clicked opened an email from his travel agent his first thought was someone had made a glaring typo.

When Bruce Grocock clicked open an email from his travel agent his first thought was someone had made a glaring typo.

Five months ago, to the day, the 76-year-old would have been on a month-long holiday with his wife, Rhonda, after making the almost 17-hour flight from Perth to Canada.

The trip was booked with Flight Centre, through third-party supplier Scenic, for a 27-day jaunt through the Rocky Mountains, to Canada's glacial lakes and the wild lands, and wild life, of Alaska.

It was to be the couple's last big overseas trip and set them back almost $40,000.

READ MORE: Is your cancelled travel included in consumer watchdog investigation?

Rhonda and Bruce (pictured) were due to travel to Canada in May this year.

Yet, with the rapid spread of the global coronavirus pandemic international borders were closed in March and remained closed, leaving the couple's holiday plans and an entire industry grounded.

The Grococks were instead hit with a trip cancellation fee of $32,536 and a refund offer of just $7103. They were also told a refund could take up to 180 days, or almost six months.

"I was flabbergasted," Mr Grocock told nine.com.au, recalling his reaction to the refund email.

"I wrote to them (Flight Centre) to make sure they hadn't got it back to front."

The travel agency passed on Scenic's reply – an assurance of no error and advised him they "are holding funds of $39,639.00 on file for your future travel".

"I have approached both Flight Centre and Scenic about a refund but Scenic are only offering us a credit till 31 December 2022," Mr Grocock said.

"After this date I may request a refund but what guarantee of that happening? We're both in our 70s. it was our last big trip away. And all of a sudden crash.

READ MORE: Melbourne pensioners paid $70000 for lifetime trip now awaiting refunds

The economic impact of the pandemic has forced Flight Centre to temporarily stand down almost 4000 Australian workers since March.

"I have written to Scenic asking for a complete breakdown of the cancellation fees but haven't heard back to date."

A Flight Centre spokesperson told nine.com.au they are aware of Scenic's offer to Mr Grocock.

"We understand Mr Grocock sought this information as he has a travel insurance policy that would cover such legitimate cancellation costs," the spokesperson told nine.com.au in an email.

"If this is the case, a travel insurance claim would be the correct avenue for Mr Grocock to pursue in the first instance to avoid losses as a result of the cancellation of his travel arrangements.

"Should Mr Grocock's claim be declined or partially declined, Scenic is very receptive to negotiating an alternative resolution with Mr Grocock which would see him receiving a partial refund and future travel credit rather than sustaining considerable losses by way of cancellation fees."

The spokesperson said the breakdown provided by Scenic was provided on the understanding it was to be used for the purpose of lodging an insurance claim.

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"Had Scenic negotiated a partial refund/ partial credit resolution with Mr Grocock at that stage, it would not have enabled him to lodge the insurance claim," they said.

Travel agencies under fire over cancellation fees

The spokesperson said any suggestion Flight Centre withholds customer funds to support its business is false, with the company to date repaying $954 million in refunds to customers.

Thousands without answers

The Grococks are not alone in their stress and frustration over the confusion and chaos that has befallen the travel sector during the pandemic.

Data from the Australian Federation of Travel Agents estimates Australians are out of pocket $10 billion in suspended or cancelled trips. To date, $6 billion has been returned.

Consumer advocate Adam Glezer has been lobbying for the couple and thousands of others through his Facebook action groups, Flight Centre Class Action Australia and Travel Industry Issues-The Need for change for Australians. The groups have almost 9000 members combined.

"(The Grococks) are one of thousands who are owed refunds, totally in the millions, from well over 50 different companies," Mr Glezer told nine.com.au.

"The fact that (Scenic) are holding such a large sum and aren't providing an itemised breakdown per the ACCC Best Practice Guide, is mind boggling."

"What's even worse is that they are able to get away with it."

The Australian Competition and Consumer Commission is investigating travel companies that gave consumers misleading information on refunds during the pandemic. The commission has also set up a dedicated information page for consumers.

Mr Glezer said he is finalising proposed legislation for the federal government in the travel sector.

"The aim of this legislation is to put a layer of protection in place for customers and to bring consumer confidence back, which is currently at an all-time low," he said.

"It's really time for the government to step in and stop this type of behaviour. Unless things change dramatically, who would feel confident enough to pay for travel after this? I know I wouldn't."

The view from The Village - the luxury resort on Thailand's Coconut Island.

Ruth Finnie is one traveller who has lost confidence in the local industry during the pandemic.

The avid jetsetter from Perth had made a group booking with Luxury Escapes to the private Coconut Island in Thailand for April this year.

When COVID-19 hit she was told there were no refunds, only credit to be used by the end of 2020.

After facing the loss of thousands of dollars she was slugged with a $300 per-person cancellation fee.

Ms Finnie is one of the lucky ones, she received her refund in May this year, after much agonising, including a planned hearing with the WA administrative tribunal. The experience compelled her to set up the Luxury Escaped Us Facebook page where members can share experience and offer help.

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"We've got about 1300 members on the page and people are just going through hell on earth to get refunds," she said.

"Some people are immune-compromised which means they won't get to travel without a vaccine…. Some are 80 years old and they've been through hell and high water for a lot of money. It's no good holding onto their money… at 80 there's no way they'll be allowed to travel.

What are your rights as a consumer?

"I had a lady she's just refunded $14,000 that she's been chasing for months. There have been other cases where it's been even a lot more than that - hundreds of thousands of dollars between the whole group people are trying to recoup."

Ms Finnie said one of the biggest concerns among group members was a lack of communication from Luxury Escapes.

"Basically, it was no, under our terms and conditions, you're not entitled to a refund. There was no real explanation," she said.

Ms Finnie claimed people's comments about losing substantial amounts of money were deleted and some users were blocked from the Facebook group.

A Luxury Escapes spokesperson said over the past five months more than 70,000 booking changes have been processed. In a normal month, the group would process around 1000.

"For a period during the crisis, we had almost every staff member helping out in some way for customer service," the spokesperson said.

"We acknowledge it's been incredibly difficult for our customers, and we haven't been able to achieve the response times that we usually pride ourselves on, but we have done, and continue to do absolutely everything we can to provide comfort and assistance to our fantastic customers."

As for claims about deleting customer posts and blocking comments, the spokesperson said, at times, some comments were removed. Thought, it was well under 1 per cent.

"We have a very active, highly engaged social media community with over 1.3 million members and 9500 comments monthly. We encourage comments, debates and suggestions, we live and breathe travel and so do many of our customers," the spokesperson said.

"Our community moderators do occasionally block or hide comments that other customers flag to us as inappropriate and that are outside the community rules, but in general, we will always prefer to foster open and honest debate, and it is a tiny fraction of comments that would be removed."

The forgotten thousands

With the shutdown of the travel industry, customers were not alone in sharing the grief and stress of loss. A large majority of travel agency staff, hotel staff, tour operator staff, airline crew, ground crew and others associated with the tourism industry have been directly affected.

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A report from Tourism Research Australia found more than 660,000 people were employed in tourism in Australia in 2018–19 with another 370,000 provided the industry with goods and services.

"With travel curtailed since March 2020, tourism has been among the sectors most affected. Between mid-March and early May 2020, ABS payroll data shows that 7 per cent of jobs were shed nationally," the TRA reported, dated August 2020, said.

"For the arts and recreation sector, job losses stood at 19 per cent, for accommodation and hospitality there were 27 per cent fewer jobs."

Qantas plans to make 6000 cuts to its workforce and continue to stand down 15,000 staff as a result of the pandemic and last week STA Travel collapsed into liquidation following a creditors meeting.

Qantas planes parked on the tarmac at Sydney Airport, in Australia. Restrictions have been placed on all non-essential business and strict social distancing rules are in place across Australia in response to the COVID-19 pandemic.

The travel agency operated a number of online travel agent services and a network of 27 shopfront outlets across Australia, all of which have closed. All staff were made redundant.

During this period, the economic impact the pandemic has had on the travel industry has forced Flight Centre to temporarily stand down almost 4000 Australian workers.

"The entire world has ground to a halt and unravelling a booking takes time and an extraordinary amount of work," Australian Federation of Travel Agents chair Tom Manwaring told nine.com.au.

"Each and every supplier has their own policy and travel agents are managing the complexity of that process.

What once took days is now taking weeks and months… most agencies are spending between 50 and 80 hours a week on this. They are not being paid for this work."

Mr Manwaring said travel agents have secured the return of $6 billion from airlines, hotels and tour operators to Australian consumers, with $4 billion still to be returned.

"The livelihood of travel agents has been on hold for almost eight months. International travel drives the travel agent sector which was a thriving industry prior to COVID," he said.

"We love our customers and have continued to work around the clock to support them despite having no income. We need Federal Government support to allow us to continue to do this."

He said while the government has moved to support domestic tourism, it does little to help the 4000 travel agents and 40,000 staff.

"We desperately need targeted support hence our pre-budget ask of a tailored $125 million support package. Without this, the closure of travel agencies across Australia will continue.":

Contact reporter Kate Kachor at kkachor@nine.com.au.

Source: 9News https://www.9news.com.au/national/tourism-covid-flight-centre-customer-refunds-and-an-industry-scramblng-for-survival/b42430a5-c480-4d32-beed-f8e9b8bdfb9a

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