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The Travel Agency Refund Conundrum

Prior to the coronavirus pandemic, leading disruptive influences in travel included alternative accommodations and artificial intelligence, but during the current crisis refunds and cancellations have shattered finances, travel policies, business models, and partner and customer relationships. The fallout has triggered flexible cancellation policies, booking incentives, and some attempts at fence-mending.

Consider Airbnb, which saw reservations drop some 85 percent in early April. Citing healthy and safety reasons, the company opted to provide full refunds in the form of cash or vouchers for future travel to guests, outraging hosts who were left to cope with a loss of income they had counted on in the face of mortgage payments that came due. Adding kindling wood from a host perspective, guests can use the vouchers for future travel at any Airbnb-listed property, and aren’t limited to the location they cancelled. Many hosts are so miffed that there is chatter about lawsuits and abandoning their Airbnb listings en masse.

But Airbnb is a two-sided marketplace, and the policy also drew fire from guests, who were forced to provide documentation that local governmental policies or personal health issues barred them from traveling in order to recoup cash or vouchers. Airbnb established a $260 million fund to assist hosts, but they complained that the payments were tardy and the amounts paltry. Airbnb co-founder and CEO Brian Chesky has been on a quasi-apology tour ever since, making a weekly video presentation to hosts, taking their prepackaged questions, and vowing to repair the relationship. felk Bruce Poon Tip, the co-founder and owner of adventure tour operator G Adventures, headquartered in Toronto, can appreciate the complexities of the travel marketplace when it comes to cancellations, refunds, and an array of supply chain relationships. His company takes tour bookings from travelers in some 160 countries, deals with what he says are tens of thousands of local operators, whether it is a boat tour company in the Maldives or horseback riding tour operator in Mongolio, and has to navigate an immense collection conflicting regulations around the globe related to coronavirus.

Referring to customers demanding refunds and suppliers reluctant to provide refunds to G Adventures for payments sometimes made a year in advance, Poon Tip said: “There are so many variables when you are dealing with international tours that compound the issues. We’ve been operating like this for decades as an industry and no one anticipated that the planet would 'shut dwon'.

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