{"id":21714,"date":"2020-04-08T15:17:25","date_gmt":"2020-04-08T19:17:25","guid":{"rendered":"https:\/\/www.tripcentral.ca\/blog\/?p=21714"},"modified":"2020-06-22T16:18:15","modified_gmt":"2020-06-22T20:18:15","slug":"covid-19-why-cant-i-get-a-refund-on-travel","status":"publish","type":"post","link":"https:\/\/www.tripcentral.ca\/blog\/covid-19-why-cant-i-get-a-refund-on-travel\/","title":{"rendered":"COVID-19 Why Can’t I Get A Refund On Travel?"},"content":{"rendered":"\n

Why can\u2019t I just get a refund for the\ntrip cancelled due to COVID-19?<\/strong><\/p>\n\n\n\n

You booked a trip with us.  You paid for it.  Through no fault of your own, you can\u2019t use\nit, and so the natural response is \u201cI want my money back\u201d.  Logical, and how most of the world works in\nnormal times.<\/p>\n\n\n\n

Travel is one of the only things paid in\nadvance\u2026<\/strong><\/p>\n\n\n\n

Airlines and hotels offer higher fares in\nexchange for the ability for customers to change with no penalty or even higher\nfares for the ability to refund.  It is\npossible to book a refundable airfare and make a hotel reservation at a rate\nthat allows you to pay when you check out of the hotel \u2013 after you use it.  For the most part, people don\u2019t want to pay\nthese high fares and room rates in exchange for that flexibility, other than\nperhaps, business travelers that know their plans are subject to change.<\/p>\n\n\n\n

The fares and rates offered are low,\nespecially for packaged bookings and lower cost flights and these fares are\nrates that are subject to terms and conditions that carry non-refundable and\noften, no changes, or changes for a penalty, depending on how far in advance\nthey are cancelled.  Often within 21\ndays, any change is deemed to be a cancellation.  Low fares and room rates are extended in\nexchange for the knowledge that there will not be \u201cno shows\u201d.  Empty seats and hotel rooms are very costly,\nas other customers were turned down from booking them.  There is a certain fixed cost to fly an\nairplane and run a hotel, and the low prices we are all accustomed to are based\non upper 90% occupancies.<\/p>\n\n\n\n

If the money was not paid in advance, the\nno show rate would be very high, and the fares and room rates would all be\nhigher as well.  This is why travel is\npurchased in advance and non-refundable.<\/p>\n\n\n\n

These are not normal times<\/strong><\/p>\n\n\n\n

The entire regime of fares and restrictions\nnever contemplated what we are going through today.  9\/11 and other demand shocks were nothing\ncompared to this.  As such, travel\nsuppliers are invoking \u201cForce Majeure\u201d which typically applies to things like\nwar and acts of God such as a pandemic. \nJust as your position as a customer is that this is not your fault,\nneither is it the airline, hotel, cruise line, attraction, tour guide,\netc.  <\/p>\n\n\n\n

This works both ways.  While they are not providing a refund, they\nare throwing away all other rules and restrictions like change fees, in some\ncases inventory restrictions, so that everyone can re-book their trip.  It would be an unconscionable position to say\nthat they get to keep your money and never provide the service.<\/p>\n\n\n\n

tripcentral.ca or any other travel\nagency does not have your money<\/strong><\/p>\n\n\n\n

We are an agent for our airline, cruise\nline, and tour operator suppliers.  As\nsuch, we cannot modify their terms and conditions of sale, nor do we have your\nmoney.  If you paid by credit card, your\ncard was charged by our supplier.  If you\npaid in any other form of payment, the funds have already been passed to us to\nour supplier for your trip.  We simply do\nnot have your money, nor do we, or any other travel agency no matter how big,\nhave the capacity to refund you.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

The airline, tour operator, cruise line does\nnot have your money anymore<\/strong><\/p>\n\n\n\n

This is the sad reality of how the global\ntravel industry is financed.  This is\nsomething that we as a company and its shareholders, through the Association of\nCanadian Travel Agencies has been warning Federal and Provincial governments about\nfor years.  The fact is, globally,\nadvance customer monies are not held in any sort of trust, or even macro\ntrust.  Governments are well aware of\nthis but reticent to regulate in this area. \ntripcentral.ca\u2019s President had an in-person conversation with Transport\nMinister Marc Garneau before developing the Air Passenger Protection\nregulations, where it was clear that the Government was not interested in any\nfinancial regulation of the airlines.  As\nsuch, customers are unsecured creditors in a bankruptcy, well after secured\ncreditors.  This was known and decided by\npast governments as well to be a very rare and \u201cnearly impossible\u201d scenario to\nburden airlines with this financial constraint. \nIt is the same around the world, and regulation in Canada would have to\napply to foreign carriers selling flights in Canada.  If you disagree with the way things are, we\nsuggest you write to the federal Minister of Transport, the provincial Minister\nof Consumer and Business services, and advocate for financial regulations and a\npassenger protection scheme for bankruptcies \u2013 but it doesn\u2019t exist today.<\/p>\n\n\n\n

The truth is your money was already spent\nby the airline or cruise line or passed on to a hotel and they have already\nspent it.  Tour operators and travel\nagencies in Ontario are required to hold consumer monies in trust, but once\nthey are passed to federally regulated airlines and foreign cruise lines and\nhotels, the money is no longer held in trust. \nCruise lines are heavily indebted and, in most cases, have less than 10%\nof the money customers have advanced. \nThey have no financial capacity to refund, and their lenders are not\nabout to take second place.<\/p>\n\n\n\n

Industry-wide refunds would bankrupt the\nindustry as the process began, and as a result, no one would get their money\nanyway.  Transportation links would be\ndisrupted within Canada and abroad, future travel plans would now be at risk\n(not only financially), and it would be another blow to the economy overall (and\nits chain reaction).  It\u2019s for this\nreason that the Canadian Transportation Agency wrote a plain language position\nthat future travel credit is an acceptable remedy due to COVID-19.<\/p>\n\n\n\n

https:\/\/www.otc-cta.gc.ca\/eng\/statement-vouchers<\/a><\/p>\n\n\n\n

Further, the Ontario Government amended\nregulations to allow for future travel credits as adequate compensation and\nwill allow future travel credit claims in the event of a failure of an Ontario\nregistrant wholesaler.  What they don\u2019t\nsay, is that there is currently an event cap of $5M per failure, and a failure\nof a major tour operator would only give \u201ccents on the dollar.<\/p>\n\n\n\n

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COVID-19\/novel coronavirus \u2013 information for consumers who have booked travel with an Ontario travel agency, website or tour operator<\/a><\/blockquote>