The corporate giant Flight Centre asked a family to pay $2,100 in cancellation fees to process a hotel refund of $1,600 for a Disneyland trip made impossible due to the coronavirus pandemic.
Flight Centre has attracted widespread anger for its handling of cancelled trips due to the pandemic, prompting multiple complaints to the Australian Competition and Consumer Commission and state-based consumer authorities.
The company has given customers a choice: take a credit voucher eligible until July next year, or pay Flight Centre a cancellation fee of $300 per person to seek refunds from each of the various hotels, airlines and tour operators.
Hallie Hill, of the Gold Coast, was forced into a position of either taking the voucher or paying $2,100 in cancellation fees to get a refund of $1,600 in accommodation for her family’s seven-person trip to Disneyland, booked last September.
“Due to the number of people on your booking, this would consume the entire amount refunded,” Flight Centre told Hill in emails seen by the Guardian. “This means the best case scenario is to leave the amount in credit for you to use on any future travel for bookings until 01 July 2021.”
Hill said there was little chance of being able to use a voucher for a new trip booked by the middle of next year.
Her 72-year-old father cares for her mother, who has an autoimmune disease and thyroid cancer.
Even if travel restrictions are eased by mid-2021, Hill said it would be next to impossible for her father to travel, given concerns for older people contracting Covid-19 and the difficulty the family had had in making arrangements for her mother to be looked after.
“[My mother] always dreamt of going to Disneyland, so she wanted to send the grandkids to Disneyland,” Hill said. “But she can’t travel.”
“He would have to leave her, and who’s meant to look after her?”
Flight Centre has asked Hill to provide medical advice confirming her mother’s condition before it will consider the issue any further.
It also said it was unable to process a refund of $7,000 for flights with Fiji Air, because the tickets are non-refundable and the airline isn’t offering money back due to Covid-19. It has offered the family a credit voucher for the flights, but Hill is unsure whether the airline will even exist in 12 months’ time.
Hill’s story is not unique. Customers have flocked to a Facebook page – “Flight Centre. Give us our refunds!” – to vent their frustration at the cancellation fees.
Earlier this month, Flight Centre announced it had taken extraodinary steps to survive the Covid-19 crisis, which has plunged its business into turmoil. It negotiated a fully underwritten $700m capital raising, secured another $200m from its existing lenders, and closed about 40% of its Australian retail outlets. It aimed to cut its annual operating expenses by $1.9bn from July.
A spokesman for Flight Centre said the cancellation fees were outlined in the standard terms and conditions and its position was “not unique and it is in line with many other travel companies in the present environment”.
“[They] reflect the fact that our people have performed the service requested of them in booking products for customers and the significant time involved in processing and securing refunds from airlines and other suppliers.”
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The spokesman said processing refunds was a “time-consuming … and intensive process” that typically took up to 12 weeks in a normal trading environment.
“In this current climate, and with airlines standing down staff and reducing services, this timeframe is being pushed out,” he said. “Where we receive refunds earlier, we are actioning this.”
Hill independently approached the owner of the hotel where she had made her booking. The company indicated it was willing to pay the refund, but it needed to be processed through Flight Centre.
Choice’s travel expert, Jodi Bird, said in most cases it was acceptable to charge reasonable cancellation fees.
“But the Flight Centre one is a good example where it’s charged per person, per policy,” he said. “So it quickly multiplies if you’ve got a couple who have booked a flight and accommodation through Flight Centre, you’ve suddenly got $1,200 in cancellation fees, which is a lot.”
The ACCC has issued guidance for the travel sector, saying customers should be treated fairly.
“If your travel is cancelled the ACCC expects that you will receive a refund or other remedy, such as a credit note or voucher, in most circumstances,” the advice said.
