What can you do when your travel unravels?
If you’ve got a big trip planned, you’ll be looking forward to seeing friends or family, eating good food, visiting exotic places, and taking a break from the daily grind. The last thing you want to deal with is a niggly consumer issue.
Credit vs refund
Q. My holiday booking’s been cancelled but I’ve only received a credit. Can I get my money back?
A. If a company can’t provide the service you paid for, your rights are location-dependent.
If you made a domestic booking or are dealing with a business operating in New Zealand, you’re covered by the Consumer Guarantees Act. The supplier must refund your money in full plus any out-of-pocket expenses – such as the additional cost of a last-minute hotel room.
If the business doesn’t operate here, you’ll have to rely on the consumer protections (if any) of its home country.
If you paid using a credit card, another option is to request a chargeback.
For flights, you can claim a refund and compensation for unexpected expenses if the cancellation was due to circumstances within the airline’s control. If it’s a domestic trip, compensation is limited to 10 times the ticket price. For international flights, the Montreal Convention (an international agreement on airline responsibilities) limits reimbursement to approximately NZ$8500.
Despite these consumer protections, we continue to get complaints about travel providers cancelling a service and telling customers they’re only entitled to a credit.
For example, two Consumer members booked two nights’ accommodation in Nelson during the Christmas holidays through Airbnb. Three days prior to our members’ arrival, the host cancelled the $250 booking. Airbnb was unable to offer any alternative accommodation nearby and the pair were forced to sleep in their car.
Though our members wanted a full refund, Airbnb only offered a credit. This is despite their terms and conditions stating: “If a host cancels a confirmed booking, the guest will receive a full refund.”
After we asked Airbnb about the cancelled booking, it reviewed the case and offered the couple $200 in compensation in addition to the credit.
In another case, two Consumer members booked an Air New Zealand flight from Auckland to Cairns. Six weeks prior to departure, the airline cancelled the flight and the couple were re-booked on to a flight departing the next day.
Since the new arrival time affected our members’ travel plans, they rang Air New Zealand expecting to get their money back to put towards a replacement journey.
Rather than offering compensation, the airline asked them to pay $120 more to fly to Brisbane, though dropped it to $20 when they objected. The pair then had to fork out another $425 on a connecting flight to Cairns.
When we advised the couple Air New Zealand was liable for their extra expenses, including the $425 cost of the Brisbane to Cairns flight and its $20 charge, they filed a complaint with the airline.
After reviewing the case, Air New Zealand refunded the $445 and offered 110 Airpoints as an apology.
Flight cancellations and delays
Q. My flight has been cancelled and now I’m stuck in this transit lounge until the next service departs. What are my rights?
A. If it’s an international flight, your rights differ depending on where you are, where you’re heading and where the airline is based.
Assuming the airline is at fault, compensation should include reasonably foreseeable losses caused by the snag, such as the cost of meals, missed connections or events.
The EU’s Denied-boarding compensation system provides clear-cut consumer protection. It can be relied on if you're departing from an EU airport - or flying into an EU airport on an airline based in the EU.
The system specifies the compensation you’ll receive if the carrier is responsible for your flight’s cancellation or delay. For cancellations, you’re entitled to:
- re-routing to your final destination, a return flight home or a refund
- assistance such as meals, free phone calls and accommodation (if you’re stranded overnight)
- compensation proportionate to the distance you’re travelling – up to €600 (NZ$1000) for flights further than 3500km.
Across the ditch, your right to compensation is murkier. Choice, the Australian consumer organisation, says most airlines will either carry you on another scheduled service or give you a refund if they’re at fault for the cancellation. Some will pay for meals, accommodation and transfers, but it’s at their discretion.
In the US, the Department of Transportation only requires airlines to compensate you if you’re bumped from your flight due to over-booking. Compensation is based on the length of the delay and whether you were voluntarily or involuntarily bumped. If it’s the latter, you can get up to 400% of your one-way fare capped at US$1350 (NZ$2050).
Back here, the Civil Aviation Act requires an airline to compensate you if a domestic flight is cancelled or delayed for reasons within its control. Think staffing issues such as the recent cancellation of Jetstar services between Auckland and Palmerston North due to pilot sickness. The airline doesn't have to compensate you if the delay is caused by uncontrollable factors such as the weather.
Assuming the airline is at fault, compensation should include reasonably foreseeable losses caused by the snag, such as the cost of meals, missed connections or events. Cover is limited to the actual cost of the delay, or 10 times the cost of the ticket, whichever is lower. Passengers on the cancelled Jetstar services had the option of being refunded or re-routed to their final destination. Accommodation was provided where necessary.
Q. Because of delays to an international flight, I missed my onward connection. Does the airline have to reimburse my extra expenses?
A. If the delay was within the airline’s control, yes. Similar to cancellations, if your flight journey’s interrupted and you’re out of pocket, the airline must reimburse you under the Montreal Convention (up to the set limit). If you’re flying through the EU, you may have additional protections.
If the airline doesn’t pay up, you can enforce your rights through the Disputes Tribunal. It’ll cost you $45 to file a claim if you’re asking for less than $2000 (the fee rises for claims above this).
For delays beyond the airline’s control, such as weather events, check with your travel insurer (if you have one), and the terms and conditions of your ticket, to see if you’re covered.
For their mid-winter vacation, the Russell family booked Emirates flights from Wellington to Dublin, transiting in Melbourne and Dubai. Unfortunately, the plane’s late departure out of Wellington meant the family missed their connecting flight.
The Montreal Convention holds [an airline] responsible for any failures of its code-share partners.
Successive delays and re-routing meant the family not only arrived two days late in London, but were also told they’d have to pay an additional $1200 for the flight that would finally get them to Dublin.
Derrick Russell complained to Emirates, asking the airline to reimburse this out-of-pocket expense. He expected a prompt response and apology.
When Emirates finally replied two months later, it refused to pay up and washed its hands of the matter, because its code-share partner, Qantas, operated the delayed flights.
“Emirates was happy to take our money upfront but once there was a problem with its service (or its code-share partner’s service), it just didn’t want to know and it used a series of delaying tactics to defer and avoid accountability,” Mr Russell said.
The Montreal Convention holds Emirates responsible for any failures of its code-share partners.
Despite this, Emirates offered our members little more than a few air miles. We advised the Russells to file a claim with the Disputes Tribunal for the cost of the last-minute flights from London to Dublin and other expenses caused by the family’s late arrival.
A couple of days before the tribunal hearing date, Emirates and Qantas offered the Russells a full settlement.
Lost and damaged luggage
Q. My luggage has been lost in transit. Can I claim compensation?
A. On an international flight, your luggage is covered by the Montreal Convention. The convention sets out the maximum amount an airline has to pay if your luggage is lost, damaged or delayed. The sum is about $2300 for each passenger.
If your luggage is delayed, the airline’s compensation is limited to expenses for essential items. Typically, airlines don’t accept liability for consequential losses.
To claim for damaged luggage, you must write to the airline within seven days of getting your bags back. For delayed luggage, you must claim within 21 days.
On a domestic flight, your rights are set out in the Contract and Commercial Law Act. Here, the airline is liable for loss or damage up to $2000.
Under the Act, you have 30 days to make a claim. However, the airline is allowed to specify a shorter period in its contract. Air New Zealand gives you seven days to report lost or damaged luggage. Jetstar gives you 21 days to report a lost bag and three days to report a damaged bag.
Tip: Stuck in transit? Luggage gone walkabout? Your travel insurance may afford greater cover than the law. For instance, some comprehensive policies cover lost and unrecoverable luggage up to $30,000. See our Travel insurance guide for more information.
Tamsin travelled from the UK to New Zealand in October 2015. On landing, she discovered a piece of her luggage was missing.
Tamsin joined the queue of people reporting lost luggage at Auckland airport. “Within minutes of me getting to the front of the queue, the handling agent had tracked my luggage in LA and assured me it would be sent to my nearest airport the next day.” The next day – a Sunday – an airport staffer drove 40 minutes to Tamsin’s house to return her lost bag.
The claim game
If something goes wrong, you have to give the travel agency or tour operator an opportunity to put it right. There’s a chance they’ll be able to find a solution without inconveniencing you too much.
However, if the service provider can’t fix the issue, you can claim compensation. For example, you can ask the agency to cover the cost of getting you on the next flight if it’s the reason you missed your connection. You can also claim for reasonable consequential losses, such as the cost of a meal in the airport while you wait for your new flight to board.
As you’ll have to pay these costs upfront and seek compensation upon your return, it’s essential you gather receipts and other documents that’ll support your claim.
The same applies if you want compensation under your travel insurance policy. Make sure you claim within your policy’s time limits and collect evidence that backs up your loss.
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Travel agency slip-ups
Q. The travel agency didn’t book our tickets on the agreed date and now the price of flights has skyrocketed. Who’s liable for the additional costs?
A. The agency should foot the bill as it was responsible for arranging the contract between you and the airline. As a service provider, it’s obligated by the Consumer Guarantees Act (CGA) to carry out the service with reasonable care and skill.
The CGA’s reasonable care and skill provisions may prove useful when it comes to other travel agency-related issues. You can call on the CGA if the agency:
- arranges your international flights to Europe, but doesn’t leave enough time for you to make your connection in LAX
- books you into a hotel on the outskirts of town when you specifically asked for accommodation within stone’s throw of inner-city attractions.
But there are occasions where the agency is not liable. If you arrive at the airport to discover you’ve been bumped from your flight, you should turn to the airline for compensation as it’s the responsible party.
Goods or services not as advertised
Q. I booked a package holiday that included flights, accommodation and a tour of the city. But the accommodation was nasty and the tour never eventuated. What can I do?
A. You’re covered by the CGA if your holiday was booked through a local tour company. The Act says goods and services must be up to scratch. You must give the tour company a chance to fix problems with your package holiday. But if the problems can’t be fixed, you should be able to get money back. The amount depends on whether some or none of your holiday was as described.
Note the tour operator isn’t responsible for variations caused by events outside of its control, such as bad weather. But you can still expect suitable alternatives or partial refunds if aspects of your holiday can’t be fulfilled.
Your rights differ if the tour operator is based overseas. In the EU, you’re covered by the Package Travel Directive. If your holiday is cancelled or significantly altered before you leave, you have the option of:
- accepting a superior tour for no extra cost
- accepting an inferior tour with a corresponding discount
- cancelling the trip and receiving a full refund.
For cancellations or changes post-departure, you’re entitled to:
- compensation if the alternative arrangements are inferior
- transport home and compensation (assuming you have good reason to reject any alternative arrangements)
In countries such as Australia and the US, you’ll have to rely on general consumer law like you do here.
Hidden fees and charges
Q. A travel agent was advertising cheap flights and accommodation. When I took up the offer, I was charged an extra $24.95 for booking online. Is this kosher?
A. Not really. The Fair Trading Act (FTA) prohibits misleading representations about price. You should be able to book the trip for the amount advertised. Unfortunately, the travel industry is adept at monetising even the smallest service. According to a 2014 survey by Choice, online bookings top the list of travel woes with hidden fees “far and away” the biggest gripe.
You also need to be aware of any costs associated with altering or cancelling your booking after you've paid. Will you forgo your deposit if you cancel after a certain point? The answer lies in the company’s terms and conditions.
Challenge a company if the conditions or fees for cancelling a booking seem unreasonable. Under the FTA, a company's cancellation terms should be clear and fair.
Q. My travel agent is offering a “no change fees” add-on. Are these extras worth it?
A. These packages are marketed as a way of avoiding the often-pricey change fees charged by travel agents or airlines if you need to alter your holiday dates. However, they may not cover all change-related costs.
STA Travel’s version of this package, the MultiFLEX pass, landed the agency in hot water with the Australian Competition and Consumer Commission (ACCC). Costing “from $49”, STA Travel claimed the pass allowed customers “to change your flights without paying expensive airline change fees, saving you hundreds of dollars”.
The ACCC is taking the company to court, alleging almost two-thirds of STA Travel customers who changed their itinerary using their MultiFLEX pass were charged hidden additional commissions and fees. MultiFLEX holders paid extra in some cases even where there was no difference in airfare and taxes.
Commissioner Sarah Court said: “Many consumers who thought they were being prudent by purchasing an add-on to avoid high fees were instead worse off”.
STA Travel NZ declined to comment as the matter was before the courts.
Other travel agencies, such as Travel2be and Tripair, offer no-service-fee packages – but these only cover the company’s own change and cancellation fees. You’ll still have to fork out for any airline charges. Always read the terms and conditions carefully when booking – and consider if you’re better off booking direct with the airline.
Q. Will our travel insurance cover our legal liability if we crash our rental car?
A. Travel insurers won’t cover your legal liability if you crash a vehicle into someone or something. You’ll have to rely on the cover offered by the rental car company.
But thanks to your personal travel insurance, you may be able to skip another product offered by the rental companies – the excess waiver.
The excess is the fixed amount the rental company charges if you prang its vehicle. As the excess can run into thousands of dollars, the company will give you the option of reducing it for a fee. You don’t need to pay this fee if it’s already covered by your travel insurance. Of the 36 comprehensive policies in our online database 33 automatically provided some cover for the rental vehicle excess.
You should pack travel insurance when heading abroad, whether you’re renting a car or not. Broadly, it covers your expenses if you’re injured or fall sick, your belongings if they’re lost or damaged, and your bookings if you need to cancel a tour or flight.
Chris, her husband and a friend booked a river cruise from Bucharest to the Danube Delta and back to Vienna through a tour wholesaler in New Zealand.
About 10 days before the trio left, the wholesaler informed them the Danube’s water level was low. Chris says the wholesaler promised to keep them posted about any changes, but they heard nothing until they arrived at the hotel in Bucharest. “There, we were told the itinerary had been altered due to the lack of water.”
The three were bussed six hours across Romania to get to the cruise’s new start point. Instead of travelling 2000km on the river as planned, they only travelled 1000km.
Chris and her husband received a $900 refund for one night they lost on the boat. However, Chris thought they were due more given the cruise cost them $15,000. “We know some passengers who booked in the UK received a further £1000 (NZ$2100) for the inferior experience.”
Upon returning to New Zealand, Chris asked the tour wholesaler for compensation, but to no avail. She took her case to the Disputes Tribunal and received a higher settlement.
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