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Last Updated : Mar 24, 2020 02:36 PM IST | Source: Moneycontrol.com

Covid-19: Read the fine print before cancelling your holiday bookings

Although tour companies and airlines are cancelling bookings, there is no guarantee you’ll get a full refund

Khyati Dharamsi

Indian skies are out of bounds for travellers now. The likes of IndiGo reduced their network and other carriers such as Go Air and Vistara suspended all their international operations, the Indian government has banned all incoming international flights from March 22. Already, countries like US and Europe have banned flights from landing on their soil. But if you were in a rush to cancel your flight and hotel bookings for the months of April and May 2020, you might still have to pay a small penalty.

Mumbai-based Alpesh Dand, 40, was to fly to Dubai on March 6, but decided to cancel the trip after hearing about the rise in Coronavirus cases there. He had booked the ticket through a web portal. “Since there was no option to cancel the ticket online, I had to connect with the portal’s call centre, which was possible only after multiple attempts and a wait of 35-odd minutes. I received just Rs 10,500 back instead of my entire ticket cost worth Rs 31,000.”

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On the other hand, Vandana K, (name changed) had scheduled her return to USA on March 11, 2020. She didn’t initiate any cancellation procedure, yet received the entire ticket amount as refund and was informed by the airlines about the flight cancellation.

Booking via a travel agent or going direct

Travel insiders and several anecdotes from travellers suggest that it is relatively easier to get refunds if you have booked tickets and hotels through travel agents or hotels directly. “When someone books through our hotel directly, we have been offering refunds based on the room rent and the property. We even have a ‘pay at the hotel’ policy. But if guests have booked through online portals, they haven’t received refunds,” Says Vishal Kamat, CEO Of Kamat Group Of Hotels.

Further, if your airline or hotel or tour operator initiates the cancellation, chances are that you would get your full refund. Else, things might get a bit tricky.

If your travel date is fast approaching and you haven’t heard anything from your airline, you have no choice but to approach them yourself and try and make the best out of the situation.

“People who have booked directly through online portals are facing problems on refunds or even getting someone to answer the call centre numbers. So far we have received refunds for all the clients who had planned travel up to April 15,” a tour operator based in Italy said as she awaited a refund from railway service provider Trenitalia, with which she negotiated a voucher with one year validity, to reuse the amount.

Different tours, different standards

Broadly speaking, most of the airlines, hotels and tour operators are offering the following options these days:

- Refunds after deducting 25 per cent cancellation charge.

- Waiver of cancellation charges and full refund

- Rebook for another date (difference payable in most cases)

- Voucher to rebook within 12 months.

- Voucher of 125 per cent the booking amount in case of cruise

Even as Indian Railways announced that no fee would be applicable for cancellations of tickets booked for the 245 trains that have been cancelled across India, many domestic airlines are deducting 25 per cent of the booking amount as charges for flights scheduled before March 22, 2020.

“We are offering customers the flexibility on bookings made on or before 31 March 2020 for travel commencing on or before 30 April 2020 for one-time free-of-charge rescheduling to an alternate travel date until 31 December 2020. While Vistara will not charge any re-issuance fee, fare difference applies,” says a Vistara spokesperson

Refundable tickets booked on Spicejet Airlines for April-end, too, are being subjected to hefty cancellation charges of up to 80 per cent of the ticket costs.

Many hotels have been waiving cancellation charges for March 2020 travel. Taj Hotels have waived individual cancellation fees for hotel stays through 30 April 2020 across all their properties. Taj has also put a pause on the points’ expiry on its loyalty program, for points that were to expire between 16 March 2020 and 30 April 2020.

“In the wake of the issue, we have advised all hotels to offer a full refund to individuals and deferment of up to one year for corporates. In a normal scenario, a cancellation fee of up to 100 per cent is applicable, based on when you cancel the bookings. We have asked hotels to co-operate and check with the guests upfront as there had been ‘no show’ instances as guests couldn’t reach the location,” says Gurbaxish Singh Kohli, President, hotel and restaurant association of western India (HRAWI) & vice president, federation of hotel and restaurant associations of India (FHRAI).

As of today, it’ll be easier to get the maximum refunds for tours or travels up until April 15, 2020 due to various clampdowns across the world. However, cancellations for holidays planned in May 2020 or later might well be subjected to a hefty cancellation charge, if you try to cancel your plans rightaway.

A Moneycontrol reader wrote in saying that her family’s upcoming tour to South Africa that is to begin on 15 May 2020 is available for cancellation only after incurring a steep cancellation charge of Rs 54,000 per person against a total tour cost of Rs 4 lakh; the family has four booked on this tour.

No cruise ride

As cruise bookings need to be made well in advance, and the threat of being quarantined on a cruise ship has been experienced in international waters, a full refund or a better credit is being offered.  Varun Chadha, CEO, The Indian Representative of Royal Caribbean Cruises, says, “We are refunding the full value to our guests or giving up to 125 per cent future cruise credit when we cancel a sailing. Further, we have launched a ‘cruise with confidence’ program, where guests can cancel sailings up to 48 hours before the sailing and receive a future cruise credit for the full amount, valid through Dec 2021.”

Refund of insurance premium

With regards to the insurance cover that has been purchased along with the travel tickets, the cover cancellation charges would be waived off, say insurers. “Since early March 2020, we have refunded the entire premium to customers for the travel insurance cover. The Rs 300 flat fee that was deducted in a normal scenario is being waived off,” says Sanjay Datta, Chief-Underwriting, Claims and Reinsurance, ICICI Lombard.

However, if you are looking for some respite in the hotel booking and flight cancellation fee charges to be covered under the travel insurance plan, then you are mistaken. “The risk commences when you initiate your journey. Since the risk has not started, no compensation would be given for flight and hotel cancellations.” Typically, a travel insurance cover is issued for up to an hour before your flight is scheduled and as the flights have been cancelled ahead of time, the insurance cover does not kicked in.

Forex losses

In addition to the loss on ticket and hotel bookings, those who had purchased foreign exchange in advance for their March 2020 travel have been facing another situation of their money being stuck in foreign exchange due to currency fluctuations. “Clients who purchased the USD at Rs 71 per dollar are now being forced to liquidate the same at Rs 67-68,” said a Mumbai-based forex dealer who did not want to be named.

However, the losses are limited for those who have opted for travel forex cards. “The rates are wildly fluctuating as the supply has been affected. We are buying back physical currency, at around Rs 69 per dollar, but for forex available on travel card we would offer Rs 73 per dollar as our buying price based on the small margin involved,” says Ananth Reddy, founder of buyforexonline.com.

The difference of 2 per cent between the buying and selling price in a regular circumstance has expanded to 5-8 per cent in the current scenario.

Since you would travel later, you can hold on to foreign exchange instead of losing value by distress sale.

What should you do?

Broadly speaking, there are two check points before you decide to cancel your holidays. If your holiday is to start before April 30, it’s relatively easier to get the maximum money back. The second check point is the fineprint. Here, you have little choice but to reach out to your tour operator, travel agent, hotel or airline and reason it out with them. For instance, if the country you were set to go to isn’t issuing Visas, your case for demanding a 100 percent refund becomes a bit easier.

It’s always safer to cancel your airline tickets and get whatever money you can. Apart from the uncertainty of how long the pandemic would last, the viability of airlines themselves are in question. You never know which airline may last, and which may go bankrupt. For holidays and hotels though, you can take a credit or reschedule for a later date. Pick a date, though, as late as possible; preferably a year later to be safest.

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First Published on Mar 24, 2020 02:36 pm
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