Impact of ash crisis felt in all sectors of travel and tourism

By
|

Airlines bore the economic and operational brunt of Europe-wide airspace closures after Icelandic volcano Eyjafjallajokull sent plumes of jet-unfriendly ash across the Continent, but the impact was felt in all sectors of the travel and tourism trade.

Tour operators

Thousands of vacationers were thwarted by the volcanic ash cloud, according to tour operators, who scrambled to accommodate both those that were stranded abroad and those who couldn’t get to their destination. (Click on the map to see how the ash cloud affected aviation.) 

"After a year like 2009, we would have loved not to face such a crisis," said Frederic Langlois, CEO of Rail Europe. "But the folks who were planning to travel are still booking, and that’s good."Click on map for a larger view.

Langlois said that thousands of Rail Europe customers were impacted by volcano-related travel disruptions.

The company has received between 3,000 and 5,000 calls per day since the volcano in Iceland erupted, in addition to hundreds of emails and letters. (Aside from e-tickets for Eurostar and France’s TGV trains, customers must mail their paper tickets back to Rail Europe to exchange them or get a refund.)

Rail Europe had to hire 28 additional seasonal staff members to help manage the call volume and correspondence.

As of last Tuesday, Collette Vacations said it had approximately 1,500 travelers impacted by the volcano, namely customers preparing to leave for their vacation. Trafalgar Tours and the Globus Family of Brands each reported upwards of 1,000 travelers impacted.

Tour operators were forced to cancel or combine tours for which passengers simply couldn’t get to the destinations.

"Where smaller groups of passengers have made it to the destination where a tour is departing we’ve been able to consolidate some departures in order to fulfill their holiday plans," explained Adam Leavitt, vice president of marketing at Trafalgar.

The problem was two-fold. As customers were forced to cancel or reschedule their trips, operators were doling out additional money to pay staff working longer hours to manage the phone lines. They were also working with suppliers to minimize expenses on bookings that were unfulfilled.

Fortunately for operators, the ash crisis occurred early in the travel season.

"We don’t start operating the majority of our Europe itineraries until late April and May, so the impact to Tauck wasn’t nearly what it would have been if the disruption had occurred even just a few weeks later," said Tom Armstrong, corporate communications manager at Tauck World Discovery.

Travel insurers

A natural disaster like the volcanic ash cloud is precisely why people should invest in travel insurance, according to providers, but it has also highlighted the importance of reading the fine print of coverage.

"Travelers won’t be able to buy insurance now to cover this loss, but it’s an illustration of the need for travel insurance," said Frank Shellabear, president of the sales division at CSA. "No one foresaw this event happening."

Now that it has happened, the major providers of travel insurance have all come out with statements clarifying their coverage, including how the volcano incident is being defined, and what the cutoff was for having purchased travel insurance in order to be covered for volcano-related travel disruptions.

Depending on the provider, coverage for the volcano started anywhere between April 13 and April 15.

Travel Guard North America, for instance, is providing coverage for travel disruptions related to the volcano, which it defines as an "unforeseen event," if the plan was purchased before April 13, 2010.

Travel Insured International informed its customers that for policies purchased on or after April 15 there would be no coverage. Access America also put out a statement that customers who purchased their travel insurance policy prior to April 15 would be covered.

Once travelers who purchased insurance have established whether they’re covered or not, they then need to figure out just what exactly is covered, depending on the plan they opted for.

"In general, the disruption to air travel due to the volcanic ash cloud has triggered claims for trip cancellation, trip interruption and trip delay," explained Judy Sutton, Travel Insured’s director of product development.

In the event that customers are stranded for days, "the most important thing is to save all your receipts," advised Dan McGinnity, vice president, marketing communications at Travel Guard. "When you can, use a credit card. You will need to have receipts and documentation for filing your claim."

Added McGinnity "based on the policy you have there’s a per diem … up to seven days."

If the Eyjafjallajokull volcano in Iceland were to erupt again, the question for many providers is whether that would be considered a new and separate event.

"The volcanic activity in Iceland has not yet subsided and consequences can no longer be considered unforeseen," said Sutton. "We are monitoring this event, and it is premature to identify when this event will ‘end.’"

Cruise lines

The volcanic ash situation gave the cruise industry unique status as the only form of tourist transportation moving between North America and Europe.

Calls to Cunard Line’s reservation center tripled as travelers scrambled to get between Europe and North America. The wait list for the Queen Mary 2’s April 22 transatlantic crossing from Southampton exceeded 1,000 bookings.

While the crisis did not impact cruise ships’ ability to sail, passengers had trouble getting to the vessels, and home from them.

The volcano began spewing just as the European cruise season began, meaning many ships were en route to Europe or were already there.

Royal Caribbean Cruises Ltd. said the volcano disrupted 6% of passengers on Celebrity, Royal Caribbean International and Azamara Club ships globally. Affected passengers were trying to return home from a cruise or embark on one.

Royal Caribbean International CEO Adam Goldstein said in his blog that the line was handling the situation, "on a day-to-day and even hour-to-hour basis. Our goal is to enable as many people as possible to board our ships before the ships must depart to maintain all or nearly all of their scheduled itineraries."

He noted that the ability to get passengers to ships was undermined by a situation that impacted not just airlines but "hotels, rental cars, trains, ferries and every other element of travel and leisure. We need to take all of this into account."

As often happens when there is a crisis, cruise lines were caught between having to enforce standing policies about cruise fare protection, while being criticized for not waiving them considering the circumstances.

"This bizarre set of circumstances is a powerful reminder of the benefits of purchasing travel insurance with trip-cancellation protection," said Goldstein in his blog. "It’s impossible to generalize what coverage will be provided in this instance, but having coverage is very likely to be preferable to having no coverage.

"As always, we protect our guests who have purchased air transportation through us," he said.

Cunard took heat on cruise blogs for raising prices on transatlantic trips, but the line did make a one-time amendment to its cancellation policies for the transatlantic Queen Mary 2 sailing, giving anyone unable to join the ship due to air travel disruptions a future cruise credit equal to the value of the missed booking.

Oceania Cruises books air for far more of its customers than most lines because it has long bundled "free air" as part of the cruise price.

The cancellation of so many airports tested the line’s ability to protect such a high percentage of customers.

Spokesman Tim Rubacky called the effort to get passengers debarking Oceania ships in Europe home a "herculean task" to which 28 of the line’s air-sea people were dedicated.

Ray and Mary French, a couple debarking Oceania’s Insignia this week, said that Oceania got them home from Barcelona only one day late. They commended the line for having numerous representatives at the airport, and for taking passengers to complimentary hotels and booking them on new flights.

Despite the volcano being beyond Oceania’s control, the company "took responsibility," said the couple. "The representatives’ primary concern was to help us to get through this situation with as little disruption as possible."

Hotels

Tens, if not hundreds, of thousands of stranded passengers all over the world needed someplace to stay while waiting out the flight bans in Europe.

Many, especially the cash-strapped, opted to camp out in airports. Those with more funds availed themselves of hotels.

Although some 30 hotels in New York announced they were offering 15% discounts to stranded travelers, most hotel relief did not extend beyond refunds or free reservation changes if travelers couldn't reach their destination.

Accor did freeze its rates to make sure stranded travelers did not get gouged. Guests who were already at their hotels were allowed to stay at the same price they had been paying. And new guests seeking rooms were guaranteed the rate that was already on the calendar for April 15.

Stranded passengers"We did not increase our prices. We did not modify the rate calendar. The idea was to stick to the prices that were planned before the event," an Accor spokeswoman said.

Additionally, the company is offering refunds to travelers unable to reach their planned destinations, even for nonrefundable reservations.

In the Caribbean, where many Europeans wrapping up tropical holidays found themselves stranded, Sandals Resorts International lowered room rates across the board for guests impacted by the crisis.

Regarding the impact on business resulting from the ash fallout, the booking pattern has not changed, according to Kevin Froemming, president of Unique Vacations, worldwide representative for Sandals.

"There isn’t any indication of cancels or long-term cancels. People are pretty much taking a wait-and-see approach. Historically, these things are very short and things return to normal very quickly," Froemming said.

"Overall, guests are simply revising their stays, as people still want to come on vacation."

Comments
JDS Travel News JDS Viewpoints JDS Africa/MI