Dorine Reinstein
"Will I get my money back if I can't travel?" This is undoubtedly among the most asked questions travel consultants heard in 2020. And the question keeps popping up in 2021. For a tourism industry in tatters, the debacle around refunds is a tough challenge.
Bed nights are perishable. Unlike a pair of jeans that can be sold again if the customer has a buyer's remorse, a holiday has an expiration date. If a holiday is canceled at the last moment, the tourism provider is left with no possibility to "sell" it again. In a safari lodge with just 10 rooms, where the staff-to-guest ratio is likely to be at least four to one and supplies have to be brought in via private charters, having one empty room has massive financial implications.
Despite the financial risk, the travel industry agrees that the only way to revive tourism in 2021 and rebuild traveler confidence is to implement the most flexible cancellation policies possible.
"By far the biggest concern is financial, with clients wanting to know the monetary risk they are taking when making a deposit on a safari," said Craig Beal, of Travel Beyond.
Unfortunately, he said, suppliers' Covid-era booking terms often only apply if borders remain shut or close once again. "Very few offer terms and conditions that permit clients to cancel or automatically defer if they're afraid or the logistics become almost impossible," he explained.
According to Beal, clients understand that planning a safari is not a financially risk-free undertaking. However, they also want to avoid losing money if their trip becomes "impossible."
"Some sort of deferral commitment has become the largest nonnegotiable," Beal said. "In my opinion, all parties involved should approach each booking with the understanding that if a reasonable client would no longer travel because of changes to the travel environment, they can move their trip to next year for the same price. This type of policy would encourage people to book now, make deposits and travel as long as restrictions don't get worse or logistics such as flight schedules don't become more restrictive."
Jim Holden, the president of Holden Safaris, agreed. "The nonrefundable deposit is a thing of the past," he said. "Clients will pay a mobilization or set-up fee but will expect any deposits for accommodation to be refunded if they cannot use it for any reason, not just Covid. Travel insurance will similarly be changed to be slanted more toward mishaps and medical issues while on safari, rather than cancellation before a safari starts, with suppliers' terms and conditions relaxed to refund all deposits in the event travelers have to cancel before starting a safari."
Fortunately, most African product owners have taken the refund issue to heart and are trying to find the best solution for everyone involved.
Marcelo Novais, managing director of Ker & Downey Africa DMC, said that since September, most properties are more flexible with new bookings and allow guests to postpone trips with ease and receive refunds if their cancellation is related to travel restrictions due to Covid.
Elizabeth Gordon, of Extraordinary Journeys, agreed and said that although previous bookings are still held to the original terms and conditions at the time of booking, there is a lot more flexibility when it comes to booking new travel.
"We're seeing zero cancellation fees 30-60 days prior to travel in a handful of cases and postponements as late as 72 hours prior to travel if someone in the group has a positive Covid test," Gordon said. "We also see unprecedented flexibility by allowing postponements to future dates for travelers who are still uneasy traveling during the pandemic. Many partners on the ground have rallied behind us in considering the individual circumstances of each traveler and have supported our efforts to advocate on behalf of our clients."
Partners on the ground in Africa are indeed trying to find the best solutions for refunds. Giltedge has relaxed its booking terms considerably this year to remove clients' concerns around booking during a time of uncertainty. They said: "We have implemented a 100% refund with no cancellation fees up to April 30 and an option to postpone the vacation to travel before September, and we can hold a guest's reservation for 14 days to give them time to think before they pay."
Don Scott, owner of Tanda Tula, said it can be a headache to determine when cancellation fees should be applied and under what conditions one should consider refunding a guest.
"Whilst all monies are refundable up to 60 days from arrival (shortened to 30 days during the Covid crisis), cancellations within the period attract cancellation fees of up to 100%, as (certainly for safari products) the ability to refill a canceled bed within 60 days is challenging'" Scott said. "However, in uncertain times like these, this means guests are nervous about paying deposits until closer to the time of travel, leaving a lot of uncertainty for the products about whether their "confirmed" bookings are real or not. We are aiming to use guest deposit insurance to alleviate this uncertainty in 2021."
Guest deposit insurance is an entirely new concept that Scott is looking to launch in Q1 with the help of actuaries and lawyers. The intention of the product is that if a guest pays a deposit to secure their booking, they can add on a nominal amount to insure that deposit. If the guest needs to cancel within a cancellation period where they would be subject to cancellation fees, the policy kicks in, and they are refunded their deposit.
"The intention is to alleviate the concerns from travelers about paying deposits amid all the travel uncertainty," Scott said. "Hopefully, this will, in turn, lead to more bookings, as having that security removes part of the 'travel logistics' issues from potential travelers."
The message is simple, according to Sherwin Banda, president of African Travel. "As destination restrictions are changing regularly, people will book with suppliers that offer the greatest flexibility," he said. "Properties that have more flexible booking terms will see increased bookings."