The unprecedented number of tour operator bankruptcies in the past few months has left many travel advisors in the lurch – and many rethinking the way they do business.
In January, despite doing everything right, travel agents across North America are feeling the fallout from the closure of Australian tour operator Excite Holidays, hustling to do damage control before their clients show up at hotels where they no longer have reservations.
As they rebook, some advisors are taking the leap and eating the losses themselves; others are asking clients to pay a second time. Perhaps the best idea, though, comes from those who are being proactive, doing all they can to help their clients through the process of getting a refund from their credit-card companies.
Anna Harrison, for example, first came across Excite Travel at the Global Travel Market conference last year, where a number of colleagues mentioned meeting with the company's representatives. Trying to carefully craft an FIT that included 11 activities and three hotels in Argentina, “I was really excited to find someone who could piece together all the tours and the hotels I needed,” she said.
Following up on December 26 to confirm that everything was all set for the couple’s January 4 departure, she was surprised to find that the tango class she had arranged had been canceled—a glitch in the system, Excite said when she emailed them, nothing to worry about, we’ll get it sorted out.
But on January 3, when she called to confirm their airport transfer, it too had been canceled. She tried frantically to book another car but, with less than 24 hours until their arrival, could not—and so had no choice but to email them, apologize profusely, and offer directions on how to get a cab.
When she called the first hotel, and found their two-night reservation also had been canceled, she paid it herself rather than go back to the client, secure in the belief Excite would reimburse her when the glitch was fixed.
But over the next couple of days, as she called the other two hotels and the cooking class and the tours she had booked and paid for, she began to realize just how big a problem she had. Excite still was blaming computer glitches and promising her a full refund by January 31. But soon her calls to the office went unanswered—and there was no sign of the $3,300 her clients had paid.
Harrison is still hoping to get something back on January 31. But the tales from other travel advisors make that seem unlikely. And in any case, she has lost hours of her time, charged dozens of phone calls to Argentina, and likely lost some standing in the eyes of her customers.
So what has she learned? You can never be too careful about choosing a supplier. In this case, Excite was not a preferred supplier of her host agency, but even if it were, there is not much they could do. The United States Tour Operators Association (USTOA) and its equivalent in Australia, where Excite is based, have a fund for customers of members who go out of business—but, as Excite was only ever a USTOA associate member, it did not participate in the fund. (Excite is no longer affiliated with the USTOA.) California has a Travel Consumer Restitution Fund “for the benefit of consumers located in California who suffer losses as a result of bankruptcy, cessation of operations, insolvency, or material failure of a seller of travel to provide the transportation or travel services contracted,” but the seller of travel must be based in California.
The Best Defense
Beyond that, though, the best defense is your credit card company.
“If you book on your card and the company goes out of business, you can open a dispute, as services were not rendered,” an American Express insider, speaking off the record, told Travel Agent. “And you have until 180 days from the expected travel date, not the date you paid. Most likely the merchant will not respond and will get charged a debit balance, which basically means we are stuck. When Eastern Airlines went bankrupt, we brought rooms full of tickets to the bankruptcy hearing, and got back what we could from the bankruptcy court.
“In short, we take the hit, not the customer. The only way you are stuck is if you pay by check.”
Indeed, that was the experience of Wendy LaPorte and Becky Lukovic last summer when Italian tour operator Amandatour went under, taking their clients’ vacations with them. American Express did indeed eat the losses and reimburse their customers in full, they said. And they turned the experience into a positive that again showed the value of using a travel advisor.
As things were going south, they stayed in constant touch with their customers. LaPorte gathered all the emails and documentation that the credit cards might need “as part of the service we provide in being in the client’s corner when things don’t go right,” she said.
Lukovic told her clients that hopefully they would receive a refund from Amandatour, but if not, they could dispute the charge through their credit cards. She followed up with an email recapping everything, and personally guaranteed any charges that resulted and were not covered by American Express or travel insurance, “to ease their minds.”
“I retained the client, but they sure were nervous going to Italy,” she says. “It was crazy stressful. But when I spoke to my client I had a plan in place.”
For travel advisors in this unfortunate place, meanwhile, she suggested taking a deep breath and starting over. “Don’t panic; break it down into pieces, just like planning the trip from the beginning.”
Back to the Present
Caught in the middle of it right now, Loulu Lima, owner of Book Here, Give There Travel, reached out to her client with a phone call to explain what is happening. She followed up with an email outlining everything that has occurred, a link to a news story about Excite folding, and the steps to take going forward “so they have all the ammo they need going to the credit card company.” Then she emailed the KPMG address on the Excite voicemail message for customers looking for information, asking for a refund of the client’s payment of $1,460 toward his trip to Switzerland.
Sandy Haddick, at Dreams Are Forever Travel, was alerted by a client who actually arrived in Ireland to find his reservation had been canceled. She called and was told it was straightened out, but eventually canceled the three bookings for clients going to Barcelona in May that she had made through Excite. She asked the clients to dispute the charges, and rebooked them. The extra work is nothing, she says; her real concern is the loss of a good tour operator who had a “super-responsive” BDM and whom she “used a lot in Europe and Ireland.”
Lima, meanwhile, acknowledged she is unsure of how the whole episode will affect her relationship with the client involved. “I am hoping they can see my value, that when something goes wrong I am all over it,” she said.