28 August 2021

Covid-19 and accommodation bookings: your rights if you need to cancel

What you need to know if your plans are foiled by the lockdown.

Booked accommodation but need to cancel because of the Covid-19 lockdown? We answer common questions about consumer rights.

I booked accommodation but won’t be able to use it due to the lockdown. What should I do?

Contact the accommodation provider. If you want to delay your trip, you could always ask the company to put your booking on hold.

We’d expect businesses to be flexible about cancellations during the lockdown. It’s in the interests of good customer relations for them to do this.

I’ve asked for a refund but the accommodation provider is refusing. Can I get my money back?

First up, check the terms and conditions you were given at the time of making the booking.

Look for a clause that states what happens if the accommodation can’t be used due to events outside the control of either party (such as a pandemic). These terms sometimes use the words “force majeure”.

The company needs to make sure any cancellation terms that apply in these situations are fair. Otherwise, it risks breaching the Fair Trading Act.

In our view, a term that lets the company keep a sizable chunk or all of your money is likely to be unfair and open to challenge.

If the terms entitle you to a refund but your accommodation provider refuses? Contact your bank to ask about a chargeback (a refund to your card) if you paid by credit or debit card.

If there’s nothing in the terms that state what happens in a lockdown situation, then you can rely on the Contract and Commercial Law Act.

This act applies where a contract is “frustrated” – that is, it can’t be fulfilled due to events outside the parties’ control. It gives you the right to request a refund and limits what the company can charge to its reasonable administration costs.

In March, a Consumer NZ member successfully took an Airbnb host to the Disputes Tribunal after the host refused a refund for a booking cancelled because of the August 2020 lockdown.

The company says if I cancel, I have to pay a cancellation fee. Is that right?

It can only charge a cancellation fee if the terms and conditions allow for this – and the terms are fair.

Companies can’t just charge whatever they like. A term allowing a company to charge a steep cancellation fee in this type of situation risks being unfair and breaching the Fair Trading Act.

The same would apply if the contract allowed the company to cancel at any time without penalty but imposed a fee on the consumer for doing so.

Excessive fees may also be considered penalties under contract law and open to legal challenge.

If you’ve been unfairly stung, you may be able to get a chargeback from your bank. Alternatively, you could lodge a claim in the Disputes Tribunal for a refund.

Make a complaint to the Commerce Commission and let us know too.

I’ve decided to postpone the date of my booking but there’s an extra fee for doing so. Do I have to pay it?

The company can only charge extra to change the date of your booking if the terms and conditions allow for this (and they are fair).

You’re within your right to question any additional charges that you weren’t told about when you booked.

I was never shown any terms and conditions when I booked, but the company is now quoting them at me to refuse a refund. Do they apply?

No. Terms and conditions only form part of the deal if they were disclosed to you prior to making the booking.

Providers can’t just make up terms to suit themselves when circumstances change. The terms need to have been in place at the time the contract is made. Any attempt to impose new terms on a consumer is likely to breach the Fair Trading Act.

Member comments

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VL P.
14 Sep 2021
Er - no - if you agree to something, there is this weird thing called the law which says you have to do it.

Are people who book holidays a special class who can break contracts, defame the people who have PERFORMED their part of the contract, and extort money they are not entitled to, by DEFAMATION? Why is Consumer aiding and abetting EXTORTION and RIPPING OFF of HOLIDAY HOME OWNERS? Is that "being kind"?

MORALITY is keeping to your word. Not breaking it. If you make a contract where you have AGREED to NO REFUND, it is DISHONEST to then try to break it by demanding a refund. It is a crime under the Crimes act to extort money you are not entitled to by harassment and victimisation and "hate speech".

Travellers have the option of (a) getting travel insurance or (b) not booking - they can book on the day if they are worried about not being able to go. They CHOOSE to book, and block a host's availability.

Hosts have NO such choices. We cannot insure. We cannot choose not to accept bookings from greedy selfish entitled people who think a contract is only a contract if it suits them. The Hosts' only protection is the assurance that if their house is booked, they will get paid.

Everyone is bleating about the poor travellers. Well, actually, the money they agreed to be NOT REFUNDED is DISPOSABLE.

Hosts have no such luxury. Many of us are poorer than the greedy travellers and we rent our places because we NEED the money to pay mortage, rates, sometimes to live on. If people leave us without an income by booking then cancelling, our mortgage is unpaid. I do not want people who book then cancel. That is why I have 100% non refund (which AirBNB changed without consulting me, leaving me in serious trouble by giving my mortgage money to renters - a PUBLICITY STUNT).

Have some balance Consumer. Put your money where your mouth is, YOU pay the travellers their money back, if you feel so sorry for their loss of a holiday that you feel that hosts should be ripped off.

For my part, I will refund 100% if I am unable to fulfil the contract - if my house is burnt down - I will take the loss. I will not offer a refund if my house is available, and the Traveller is unable or unwilling to use it - I have done my part of the contract, they take the loss. That is the way the contract is structured. The losses are allocated clearly in advance. THAT is fair. My prices on AirBNB are far higher to compensate for the risk of cancellation. And I am looking at de-listing with AirBNB whose 1-week cancellation policy attracts tyre kickers who multi-book then cancel, blocking genuine bookings and losing me the income I need from my only asset - my beautiful beachfront family home which I choose to share.

AirBnB's cancellation policies are losing them quality properties and attracting low quality bookings. I would advise people looking for good quality holiday accommodation to use Bookabach and Holidayhouses which attract the quality properties.

By the way, yesterday a person who has booked my house for December through Bookabach sent me a message regarding the defamatory "ripped off travellers" article. I explained the above. I advised them they would get 100% refund if they cancel right now. They didn't cancel the booking. They apologised after they realised what they were asking.

This whole extortion exercise is media-led and normal rational people do not have that attitude at all.

Shane M.
28 Aug 2021
Refund

We had booked in Akaroa for 4 days, The only terms and conditions came though on a e-mail after we paid.

" cancellations will incur a 30% cancellation fee until 20 days before the reservation, after which 100% fee will be incurred.".

We didn't think we would get our money back. BUT the lady was very helpful and we received all our money back. Very Happy Customer.

Ross T.
28 Aug 2021
RT re a Rental

I have a rental agreement for a house effective 4th September. It is unlikely we can move at that time because of COVID lockdown. Am I liable for the rental effective from that day or when I can move in?

Maureen D.
28 Aug 2021
Be careful of booking AirBnB in Australia too

While booking an Australian holiday (when the bubble was open) we came across some terrible cancellation policies on AirBnB. Several examples of 100% refund if cancelled within 7 days of booking, then 50% after that - even when our trip date was months away! Tried contacting owners for clarification, mentioning Covid-19, without any success - they weren't interested in changing their poor cancellation conditions. It was quite difficult finding AirBnB properties with fair conditions.

R & R B.
28 Aug 2021
Booking platform cancellation blanket rules

I run a 7 bedroom Bed and Breakfast in Stratford Taranaki and advertise on several big name platforms as well as my own website. There are issues with one of these international websites who have blanket rules for every country in the world. According to their rules if your booking was made after March 2020 there are no extenuating reasons for your cancellation and you will be charged a sizable fee because you knew of the Covid 19 pandemic. There is no arguing that NZ has been in Level 1. In the same way, to remain listed on their site I have had to agree to be wearing a mask, maintaining 2 metres distances and enforcing my guests wear masks, every day for the last 18 months. Under level 2 or above this is fair, but not realistic in level 1 but as with their cancellation policy they won't budge. It is very hard to speak to a real person because if you choose the option that you want to talk about cancellation you get an automated response.

Owen W.
06 Sep 2021
Check your cancellation choices

AirBNB offers hosts 3 cancellation choices; choose the flexible one.

Alastair
28 Aug 2021
AirBnB refund

We where going to Wellington for 6 dys & then back to Feilding for 3 Days, but lockdown stopped all that. I contacted our first accommodation host in Welligton to tell her that we conldn't make because of lockdown, she replied with no problem you can have full refund, just cancel on airbnb using covid-19. So that is what I did, but airbnb only refunded $107 of the $389.38. Because we didn't cancel early enough, we where dure to stay from friday 21st Aug & lockdown was from 18th Aug. But the good news is the accommodation host is going to refund me the balance owing.
As far as the Feilding accommodadion i got a full refund becasue i could cancel a week before we where going to stay.

R & R B.
28 Aug 2021
host may be out of pocket

Just be aware that the host may not be willing to refund all they have received because they are charged a fee also. On a $300 dollar booking they may be out of pocket up to $40 or more if they refund the full amount you paid.

Alastair
30 Aug 2021
Host refund

The host will not be out of pocket as the payment to me will only be from what airbnb has paid them. I don't want the host to be out of pocket. I was just stating that there are great hosts out there who like to look after there quest.