Why Is Getting a Refund From an Online Travel Agency So Hard?

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For many travelers looking to save money, booking through a third party site like Expedia, Priceline or Orbitz has become second nature, especially for those looking for last-minute travel or package deals.

Then came the coronavirus pandemic. Many people attempting to cancel trips and get refunds have learned that including a middleman when booking a trip can make things complicated.

Luisa Ciaffa paid $ 1,545 for two flights to Florence, Italy, on Kiwi.com, a Czech online travel tech company that’s popular among students, in particular, for its low fares. On March 12, with Italy on lockdown and the World Health Organization having declared Covid-19 a pandemic, she tried to cancel and get a refund from Kiwi.com. The process, she said, “made absolutely no sense.”

She called and spent a long time on hold. When she got through to someone, she was offered a refund of 10 euros. On social media, other travelers who booked trips costing hundreds or thousands of dollars on Kiwi.com lamented that they, too, were offered 10 euros and nothing more. She was eventually given a $ 111 credit on Kiwi.com.

“Someone in what was clearly a busy call center said that our flights hadn’t been canceled yet, so it was my choice to cancel and not travel, so I couldn’t get a refund,” Ms. Ciaffa said.

When asked about the policy, Raymond Vrijenhoek, vice president for brand and strategic communications at Kiwi.com, said in an email that refunds are dependent on the policies set by airlines.

Kiwi.com is one of the smaller companies known as online travel agencies (OTAs), which include big names like Expedia.com, Priceline.com, Kayak and numerous smaller outfits. While some specialize in a particular segment, like SnapTravel, which helps people book hotels, they often serve as one-stop shops for trips that can involve flights, rental cars and hotels.

Under normal circumstances, getting a refund from an OTA is a pretty straightforward process. A traveler contacts the third party booking site and requests a refund, and the third party contacts the airline or hotel to process the refund. That’s if the traveler has booked a refundable fare, which many people who have wanted to cancel their plans did not.

On social media and in emails to The Times, many travelers complained that getting help from their OTA has been particularly difficult during the coronavirus pandemic. One site, Bookit.com, completely suspended its operations, and told customers to contact their credit card companies for assistance.

Here’s what has happened.

The agencies say they were overwhelmed by the immediate spike in travelers looking to cancel.

“The Wednesday Tom Hanks said he had coronavirus, and the NBA season got shut down was panic day,” Hussein Fazal, the chief executive of SnapTravel, said. “Everyone in the US started panicking, we saw a spike in volume and then the travel bans came.”

“We’re getting hundreds of thousands of more calls on any given day,” said Sarah Waffle Gavin, vice president for global communications and corporate brand at Expedia, which includes sites like Orbitz and HomeAway under its umbrella. “If that was the only problem, we could totally solve it.”

Expedia’s call volumes have been five to seven times higher than average, amounting to thousands more calls than it would normally receive, even during its busiest times. VRBO, the home booking site, saw its call volume increase more than 300 percent.

SnapTravel’s Mr. Fazal said call volume has been five times higher than usual and its chat volume has been three times higher than usual; its average call wait time before Covid-19 was 45 seconds and now it is 7.5 minutes, he said (though travelers have complained of spending hours on hold with various agencies).

The spike in refund requests occurred while companies were simultaneously trying to equip their own teams to work remotely, said Olivier Pailhès, co-founder and chief executive of Aircall, a cloud-based phone system that provides its technology to companies. In mid-to-late March, Aircall had a spike in calls from its customers in the travel industry.

“We had a 100 to 400 percent increase in call volume from our clients who were trying to figure out how to help people changing plans or canceling trips,” Mr. Pailhes said, adding that his company had its best week of business in March. “A lot of companies in travel have to go remote and our company is perfect for that.”

Expedia said it had to act quickly to get employees prepared to work from home to respect social distancing and shelter in place policies that were enacted around the world. The company has backup plans, but as with many industries, they were based on the idea that any emergency would be localized.

“We have a resiliency plan, so if there’s an earthquake somewhere or a coup somewhere else, we roll the calls from that call center over to another call center elsewhere in the world,” Ms. Waffle Gavin said. “But this isn’t an earthquake or a coup. This wasn’t an isolated incident. This was happening to everybody all at once. “

Some employees lacked Wi-Fi or laptops at home, which meant the company had to figure out if people could still come into offices and how to ensure they could socially distance in that space.

“The VRBO customer service team pulled off a herculean task – adding 250 agents to take calls by shifting people from other parts of the business and accelerating new hire training,” wrote Melanie Fish, a spokeswoman for VRBO, in an email.

Many of the fares booked through the OTA’s were cheaper nonrefundable fares. By design, these rooms and flights are more affordable because they bank on people’s certainty and willingness to take a risk. One analyst estimated that half or more of trips booked on Booking.com and Expedia are nonrefundable.

But when faced with a worldwide pandemic, travelers have felt they were being forced into an unfair position – told by authorities not to travel because they could risk their health and the health of others, and getting no relief from travel companies who they felt were holding their money hostage.

Mr. Fazal of SnapTravel said his company is currently mostly getting requests for refunds from people who booked nonrefundable rooms and are trying to get their money back anyway.

“If a booking is refundable, it’s easy,” he said. “But when it’s nonrefundable, it’s harder. Every OTA is built like this – the system is built to make it hard to cancel, so we’re having to go and make exceptions. “

When Bookit.com shut down, Coty Johnson was left in a lurch, unsure of how to get the $ 3,600 he’d spent on nonrefundable flights and a hotel for his honeymoon in Jamaica back. No one at Bookit has responded to his emails and calls from him. His hotel di lui won’t issue a refund, and American Airlines offered only a voucher.

“When we called the resort and airlines they informed us that the trip was never paid for and there was no refund they could process to us either, so we are still out $ 3,600 and a honeymoon,” he said.

In the face of the rush to cancel, many of the airlines moved to a more flexible policy in which they waived change fees and are letting even those who booked nonrefundable fares get a credit for a future trip. The big hotel chains made the same decision.

Major airlines, including American, Delta and United, also started letting people who had booked their flights through an online travel agency like Priceline or Travelocity get a credit or refund from the airline rather than sending them back to the online travel agency, as used to be the policy.

Giving you a credit for a future flight lets the airlines hang onto your money and also encourages you to travel with them once the pandemic is over.

But an OTA doesn’t have your money. When you book with a third-party site, they take your payment and parcel it out to the various suppliers of your vacation services.

Online travel agencies are dependent on the decisions of their hotel and airline suppliers, so they can’t preemptively issue a refund to someone without someone at the hotel or airline signing off on that refund.

Mr. Vrijenhoek, of Kiwi.com, said that is the case at his OTA “We are not holding any refunds from customers. It just takes some time to claim and receive the money back from the airlines, ”he said, adding that the workload at the company’s customer care centers was“ unprecedented, ”leading to delays.

“Most travelers will never know the name of the bus that took them from the airport to the hotel, or that it was paid for 60 days ago and their hotel was paid for a while ago,” said Jeff Ment, a travel industry lawyer. “When you’ve paid for a trip, that money goes to all those parts of your trip, and for that OTA to get it back is very difficult.”

Chris Anderson, a professor at the Cornell School of Hotel Administration echoed this. “A lot more interaction has to happen between staff at the online travel agent and staff at the hotel before a refund or credit can be offered, so it’s no longer a simple online transaction,” Mr. Anderson said.

Instead of reaching out to a hotel after a customer requests a refund, Mr. Fazal said, SnapTravel representatives have been asked by hotels that are also overwhelmed by people hoping to cancel, to gather requests for refunds and send them in bulk, rather than as they occur. A refund process that usually would take two to three days to get necessary approvals may now take several weeks, he said.

Many travelers say they have been caught in limbo between the online agency and the actual provider of the service. Brad Tinnin is one of them.

Mr. Tinnin has spent the last several weeks trying to get a refund from VRBO for a house he booked for a trip to Palm Springs, Calif. The home rental, which totaled $ 2,600, was managed by a company called Oranj Palm Vacation and was near a rental his neighbors booked on Airbnb for the same trip.

As cases of the coronavirus increased in the United States, he and his wife decided that it wouldn’t be wise to travel from their home in St. Louis, Mo. He canceled the flights which he had booked directly through American Airlines and was given a flight credit for the full cost of the flight. That process, he said, was seamless.

His neighbors received a full refund from Airbnb, but “getting a refund from Vrbo or the management company or whoever is supposed to give the actual refund has been impossible,” Mr. Tinnin said.

Mr. Tinnin reached out to Oranj Palm Vacation, which told him to contact his insurance company and VRBO. VRBO told him to contact Oranj Palm Vacation. Oranj Palm said it could cancel his reservation, relist the home and if someone else booked it, he would receive a refund, but Oranj would keep 10 percent. Then he was told by the company that his insurance company would be better equipped to help. The insurance company isn’t covering coronavirus cancellations.

Last week, VRBO said that it reached out to the property manager, and Mr. Tinnin will receive a 50 percent refund and the other 50 percent will be applied as a credit to a future stay.

Mr. Tinnin is not eager to book with VRBO again. “I’ll never use them again after this ordeal,” he said, noting that the Palm Springs trip would have been his ninth booking with the company in four years, and a tenth trip for later this year was also booked.

Sarah Firshein contributed reporting.

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