Travel agents “well within their legal rights” to charge cancellation fees, says Westbury

Travel agents “well within their legal rights” to charge cancellation fees, says Westbury

The Australian Federation of Travel Agents (AFTA) has reaffirmed its stance on cancellation fees, with CEO Jayson Westbury arguing that advisors shouldn’t be expected to work for free.

Despite the Australian Competition & Consumer Commission (ACCC) welcoming Flight Centre’s recent decision to scrap cancellation fees, Westbury said agents are “well within their legal rights” to charge a fee for the services they render to a client.

“This includes applying a cancellation fee where either the terms and conditions indicate that it applies, or where the clients request changes to their bookings which require significantly more time from the agent, and where the agent will not be remunerated in any way by the supplier,” he said.

“Suppliers remunerate travel agents for booking travel and typically do not pay agents for time spent on cancellations.”

Westbury noted that many consumers have come to realise the difficulties involved in the cancellation process during the COVID-19 pandemic.

“In the current market, the time needed to cancel often complex itineraries, negotiate with multiple suppliers, establish and read the plethora of supplier-issued terms and conditions, and work out what is in the client’s best interest, and then action an outcome takes significant time,” he explained.

“In these circumstances, it is completely unreasonable to expect any agent to work for free.”

“The government JobKeeper support may contribute to the wages of a travel agent, but it does not contribute a cent to the other operating costs associated with running a travel agency, including supporting consumers needing cancellations or credits.”

Westbury said AFTA took part in a Zoom call with ACCC chair Rod Sims yesterday, who indicated that agents legally entitled to charge fees where the circumstances are covered by terms and conditions or where a potential “frustrated” contract might exist.

“As if the travel industry is not having a difficult time along with all our clients and customers in dealing with the travel restrictions and travel bans, what we all need is clarity and understanding during these complex and difficult times,” he said.

“AFTA remains confident that constructive mutual dialog with the ACCC Taskforce will help bring greater clarity to the many issues faced by travel agents and their customers at this time.”

The industry body has also released an information flyer for customers of agents about cancellations and refunds, which can be accessed here.

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    1. Its concerning to see AFTA encouraging travel agents to maintain a strong stance against their customers on cancellation fees. Basing the stance purely on legal rights in the contract ignores the shared impact of Covid 19. Companies are standing down employees and in most cases it will be against their contractual obligations. One would have thought a more effective solution would be for the industry peak body to discourage a confrontational position and instead encourage agents to reach mutually acceptable grounds on cancellation fees, where possible. FCTG’s decision to not charge will enable them to retain good will and most likely client loyalty and is a better cost/benefit outcome for both parties. The wisdom behind this calculative and well thoughtful action will not only save them a huge cost of reconnecting with their customers post Corvid-19 but also place them as a front runner to the recovery goal. Standing firm on cancellation fees is akin to winning the battle but losing the war. As mentioned by a leading data and analytics company, Global Data, travel brands that can continue to hold an emotional attachment with their clients, particularly those that can introduce simple initiatives to maintain a connection with their customers throughout this global pandemic, will have a better chance to retain customer loyalty. So Agents, my advice is not to base your decision on your legal rights but recognise the greater value of retaining client good will and loyalty. Protect your investment through your well-earned customer loyalty. Regards, Kenton Aldrige

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