Asia’s Travel Advisors Caught in the Middle of Cancellation Quandary

It’s an extremely daunting time to be a travel advisor right now. Not only are travel advisors in Asia experiencing a massive loss of revenue as tour bookings dry up, they are also saddled with the onerous task of seeking refunds and compensation for their clients following an unprecedented cancellation surge in the wake of the coronavirus outbreak.

Amid spiraling concerns over the global health crisis as governments around the world put up travel advisories and restrictions, travel advisors say it is understandable that customers have deep reservations about traveling and would want to cancel or defer their bookings.

In most cases of paid trips yet to take place, travel agents said deferment of travel is the best course of action for their clients, in view of the uncertain and rapidly evolving situations as the coronavirus crisis drags on.

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Airlines’ Double Standards

When it comes to refunds and compensations over travel cancellations, Malaysia-based Asutra Holidays Managing Director Noor Azizi Borhan singled out airlines for presenting the “biggest difficulty” to travel agents due to their “varying refund policies,” as well as “inflexibility.”

Passengers who book directly with airlines can usually get refunds directly or amend their dates of departure in the future, according to Borhan, but group departures would not have the same treatment unless airlines declare suspensions or changes to their services.

Without the option of immediately making changes to clients’ bookings, travel advisors have no choice but “to tackle each case with the airlines’ sales team,” he added.

In the earlier situation when the rest of Europe remained open as Italy went into a lockdown, most flights to the continent still remained operational, which put travel agents in a bind as they could not announce cancellation of any trips booked except if customers opted for that, Borhan elaborated.

However, if the plug was pulled on a trip ahead of any official announcements from airlines or governments, airline refunds would not be possible, Borhan cautioned. “If we do so, we have to forfeit the airfare,” he said.

The difficulty of getting refunds from airlines is frustrating the travel agent community so much that the Malaysian Association of Tour and Travel Agents recently issued a media statement to lambast the “unfair” treatment of major tourism service providers towards travel agents, who are “the true victims of the Covid-19 outbreak”.

The association’s president Tan Kok Liang also called out Southeast Asia’s dominant budget airline AirAsia of practicing “double standards” towards travel advisors.

Tan explained: “This is because the budget airline is offering full or partial refunds to passengers that booked directly with them but not for travel agents that have placed group bookings. As a result, travel agents have been wrongly accused of cheating. It is time for AirAsia to stop discriminating against travel agents and not abuse its dominant position.”

Moreover, airlines may offer credit to travel agents instead of cash refund, which would do little to ease the financial pain of travel agencies encountering cash flow difficulties as the crisis drags on.

“AirAsia has been very tough on us, giving credit refunds for future use through the e-wallets of respective agents and not cash directly into a bank,” said Borhan.

Allies, Not Enemies

But the apparent lack of understanding among the traveling public over the terms and conditions surrounding cancellations of tour packages, said Tan, is also a disheartening issue for the crisis-hit tourism sector in Malaysia, as many travelers have threatened legal action against travel advisors over what the former perceived as deceiving practices.

According to Tan, Malaysia’s outbound tour operators are now estimated to be saddled with a potential liability of RM500 million ($116 million) collected from customers for tour packages departing from February.

He added that customers who insist on full refunds are disregarding a global standard industry practice where payments must be made in advance to secure reservations and once made, any refunds will be subject to the cancellation policy of suppliers such as airlines, hotels or theme parks.

“The crux of the issue is that cancellations were not forced onto customers. Instead customers were cancelling of their own accord due to fear of contracting covid-19,” Tan remarked.

“Consumers should instead negotiate with their travel agents for amicable solutions rather than waste resources pursuing legal action. Such actions are futile simply because local travel agents have disbursed money collected from customers to various suppliers and are unable to get a refund based on terms and conditions governing all affected parties,” he opined.

“We are in the same boat, and we’re going through these bad times too,” stressed Tan, urging against “an overreaction” from the traveling public.

Alicia Seah, spokesperson of Dynasty Travel Singapore, agreed, “Travel agents will never take advantage of the situation and it’s not in our interest to do so — customers have to understand that. We are here to assist with cancellations, otherwise customers would have to handle such matters personally.”

Singapore-based Fascinating Holidays Director Margaret Soh also seeks greater empathy and consideration from tourism’s bigger players such as hotels to survive the crisis together.

As Singapore hotels look to the domestic market to fill rooms, Soh is disappointed to find that many of these accommodation players are not even billing any commissions to travel agents, while others have set terms that exclude inbound agencies from partaking in their staycation deals.

“It’s hard to expect travel agents to promote their properties without a cent in return,” Soh added. “Everyone is bleeding now. I would prefer hotels also try to push for a win-win situation for all of us.”

In contrast, travel advisors said their strong relations with ground handlers have proven beneficial in difficult times like this, helping them to pursue the recourse for refunds from hotels, for instance, in overseas destinations when bookings are cancelled.

“Tour operators in overseas countries have been quite understanding and are quite good at fighting for us,” said Steven Wong, country manager at Tripfez, a Malaysia-based travel portal specializing in Muslim tourism.

“They would give back [refunds] where they could, whether it’s an early cancellation for a trip that hasn’t been paid yet or if we paid they allow us to keep money for future trips. We have long-standing relationships.”

Existential Crisis

The ongoing coronavirus situation has plunged the travel agent community, which had already suffered the onslaught of digitalization in the past decade, into a deeper existential crisis.

Expecting the whole of this year will come a standstill, Soh has a pretty bleak outlook for the travel agent business in the days ahead.

“Whether travel agents can survive this crisis is the million-dollar question,” said Soh, who foresees major travel agencies to downsize while smaller players may very likely bite the dust. “It’s no longer the good old days.”

Previous health crisis, including the SARS epidemic that gripped Asia in 2003, paled in comparison with the severe impacts arising from the latest coronavirus on the Asian tourism sector.

“Now is the hardest-ever time for me in my years in the travel industry, said Borhan, a travel advisor with three decades of experience under his belt. “I’m speechless and don’t know what to do.”