Helping small tour operators and niche agents with travel ecommerce
Operators Liability
The recent event of the BA threatened strike started me asking how a tour operator can protect themselves in the event of a claim for a full refund by a client should they evoke "significant change" within our standard T & C's (i.e not prepared to accept a flight with alternative airline or alterantive flight not available). In the situation of a strike by BA I would have been able to get the flight cost back (from BA) but the accommodation would already have been paid as within "peak" period and therefore no refund. I have spoken to insurance brokers and there doesn't appear to be a policy to cover this scenario. Equally, if the reverse happened and the hotel couldn't fulfill the booking (i.e. flood damage, tsuanami etc), I may not be able to get a refund for flights already paid for.
Is the answer that this is a recognised risk for all tour operators? Or is there some way of covering this liabilty?
Is the answer that this is a recognised risk for all tour operators? Or is there some way of covering this liabilty?
Replies to This Discussion
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Permalink Reply by Dee Edwards on -
Quick answer as Alex tweeted about it again today. I saw it before but left it for someone more knowledgeable on this topic.
As far as I know, this is a recognised risk. When we had something like this impact our business about 13 months ago (Bangkok airport shut due to political protests and planes couldn't get in), I asked bigger operators, the TTA and the CAA for advice. I also called our insurance broker and they said it wasn't possible to cover.
We had to give full refunds to the customers. Luckily we weren't too out of pocket (though of course it affected our cashflow considerably to basically lose a significant source of our income),
we negotiated to have credits on account on the ground arrangements.
I think the larger operators deal with this by doing 'switch sell' on a big range of products (I think most people have their time off work booked and will switch).
Hope this helps but as I said, this is not an area of expertise for me.
Regards
Dee
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Permalink Reply by Helen Mavin on -
Hi Dee,
Many thanks for your reply, it is really appreciated.
Hearing how other Operators have dealt with these difficult one off situations, is invaluable.
Regards,
Helen
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Permalink Reply by Ralph Foulds on
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I think there could be a fair dispute with the client whether a change of airline was a 'significant change'. I wouldn't think that it was.
So, if they decided to cancel after you'd offered an alternative flight, that would be their choice and they'd be due to pay cancellation fees. You can also normally charge the client for extra costs out of your control - so, if the new flight costs extra, you can pass that on. This does normally have limitations depending on how far before departure it is, and we would normally offer to subsidise the extra costs with the client as a show of goodwill, but still look to pass the extra on.
We price the flights separately to the land arrangements as per our small-business ATOL rules, and I'm not sure if it would be different if you package it all in together under a full ATOL.
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Permalink Reply by Helen Mavin on
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Hi Ralph,
Yes, having re-read my T & C's I think you are right, a change of airline is not a significant change, but if it results in a change of departure airport or outward departure time of more than 12 hours - it still could be a problem. Hopefully as Dee pointed out, clients will have booked time off and still be keen to go on holiday so wouldn't automatically cancel and would be prepared to switch, as required.
Regards Helen
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