ACCC: Five-fold increase in COVID travel complaints

Report highlights 589% rise in "contacts" for tourism/accommodation sector

A new report released by the Australian Competition and Consumer Commission (ACCC) has revealed that more than a quarter of COVID-19 complaints from the public were related to travel agencies and airlines.

In total, Australians submitted nearly 109,450 complaints, and 74.8% were from consumers.

Travel saw a nearly 500% increase in gripes for the period from 1 January to 31 October 2020, with a whopping 24,210 cases raised, up from 4,052 in 2019.

Sport & Recreation was the second-largest field drawing consumer frustration, but with just 2,339 complaints, compared to 999 (up 134%) on last year.

Some 50 travel businesses are “closely engaged” with the competition watchdog relating to issues of conduct or concern that have impacted hundreds of thousands of consumers.

The ACCC released The impact of COVID-19 on consumers and fair trading report to provide an update on how the consumer watchdog is working to assist the public during the pandemic.

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Travel sector the most complained about during COVID-19

The travel sector showed, by far, the greatest increase in contacts (enquiries or reports) over the 10-month period (January to October). Tourism/accommodation industry contacts went up by 589% and air/sea passenger transport industry contacts increased by 358% from 2019 data.

COVID travel complaints centred around one of four things:

  • A lack of transparency by travel agents on the efforts being undertaken to recover funds from suppliers, and if funds had been returned to the agent
  • Misleading consumers on cancellation fees
  • Inconsistency in communications
  • Delays regarding the provision of remedies

“Our primary approach has been to educate consumers and businesses about their rights and obligations. Additionally, we have been engaging directly with businesses in a collaborative manner and at an earlier stage, with the primary purpose of seeking to understand and resolve issues through pragmatic solutions,” the ACCC said in the report.

“The majority of COVID-19 related consumer reports we have received concern the travel industry. … This is unsurprising given the immense impact that domestic and international travel restrictions, and the subsequent cancellation of travel bookings, have had on both consumers and travel businesses,” the regulator said.

“The situation with respect to travel cancellations has been complicated further by the majority of travel insurance products excluding cancellations resulting from the pandemic.”

The ACCC said that an internal COVID-19 taskforce had primarily focused on addressing travel-related concerns, engaging with around 50 travel businesses.

“In many cases this engagement resulted in travel businesses changing their approach to ensure they were offering consumers refunds or other remedies for cancelled travel in accordance with their entitlements under
the terms and conditions of their contract.

“The ACCC recognises that many businesses in the travel sector have assisted consumers by implementing hardship policies and providing refunds for those consumers in exceptional circumstances of health or financial hardship. Unfortunately, other businesses have been less willing to accommodate hardship claims,” the organisation reported.

Image credit: Anna Shvets from Pexels

Most travel businesses solved disputes quickly, some “complicating factors” for consumers

The watchdog said that the majority of COVID travel complaints were resolved through “quick confidential intervention and engagement with the business in question”.

There were a number of “complicating factors” for consumers seeking travel refunds, such as:

  • limited application of consumer guarantees in circumstances where businesses have cancelled services due to government restrictions,
  • complex operating models which often involve third parties,
  • limited protections included in travel insurance policies which commonly exclude force majeure events, such as pandemics.

The organisation added that in some cases businesses should consider consumer requests for refunds, rather than credits. The ACCC said that consumers may be unable to use a credit before its expiration, suffering from financial hardship due to COVID-19, unable to book a service due to the risk of COVID-19 or unable to attend the same event as it was a one-off occasion.

Grounded planes during COVID-19 | credit: Ellen Jenni from Unsplash

The ACCC said on the topic of hardship, it has received a “mixed response”.

“Some businesses have demonstrated best practice by diligently applying hardship policies in considering requests for remedies, despite the business also struggling financially during COVID-19.”

“In other cases, we have seen businesses being inconsistent in their consideration of hardship cases, by going above and beyond their contractual obligations to provide fair outcomes for some consumers facing hardship or other extenuating circumstances, while treating other consumers in similar situations less favourably.”

The travel-related section of the 25-page report concludes with the ACCC saying it remains concerned about the expiration date of some credit vouchers that have been provided to consumers of cancelled bookings. It suggests that a ‘no expiry’ period may be required, or at least allowing for the COVID-19 restrictions on travel to be lifted before offering an expiry period.

To view the full report, including numerous case studies, click here.

Lead image credit: Anna Shvets from Pexels

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