Wednesday, 2 June 2021
Private Members' Business
COVID-19: Travel Cancellation
by leave—On behalf of the member for Menzies, I move:
That this House:
(1) notes that:
(a) the COVID-19 crisis has caused the cancellation or delay of flights and other travel for many Australians;
(b) many Australians have experienced considerable difficulty in obtaining the refund of monies paid for travel, accommodation and other tourist activities;
(c) while many travel agents have acted with integrity and fairness, some have not done so; and
(d) the COVID-19 crisis has exposed the absence of consumer protections for Australian travellers; and
(2) urges Australian governments to enact legislation that:
(a) provides consumers with a right to a refund if the service they paid for hasn't been fulfilled due to situations outside of human control;
(b) establishes mandatory trust accounts for all travel agents, including online travel agents;
(c) provides for transparent fee for service for all travel agents with no hidden costs; and
(d) ensures that supplier terms and conditions are provided to customers by travel agents.
Obviously I am not the member for Menzies, unless he's had a late growth spurt! Unfortunately, he is unwell—there is a doctor in the House today—so I have taken his spot and wish him a quick recovery. I was already going to speak on this motion, however, as this is an issue which I know has affected many people in my electorate of Bennelong, and I'm very happy to move the motion in his name.
The surprises of 2020 affected everybody in some way. We have spoken a lot in this place about the businesses that struggled, and there's been plenty said about the way our health system has scrambled and adapted. We have sympathised with cafe owners, praised nurses and supported the unemployed. One of the more pervasive casualties of 2020 is confidence—not that we aren't confident we will get through this; that confidence remains high. Rather, it is the uncertainty about when we will return to normal. Everyone knows someone who has made a plan where the light was visible at the end of the tunnel, only to have it dashed as their town returned to a snap lockdown. Victorians are feeling this acutely right now. Many of these dashed plans have been in travel. Australia is a nation of tourists, and when borders shut, planes stopped flying and cruise ships remained in the dock there were hundreds of thousands of people who were left out of pocket. Many of them were subsequently made whole again through refunds. Some were issued with vouchers that they still haven't been able to use. Regrettably, some will not see all of their money again.
The ACCC highlights that the terms and conditions relating to refunds or vouchers differ, and the rules at the time of the booking are those which must be followed. Terms and conditions vary between travel providers, and in some cases consumers might not be entitled to a full refund or any refund of their booking. But the pandemic has made clear the need for an overarching system and to bring some transparency to the market. Over the past year, I have been contacted by constituents who have experienced difficulties in receiving credits or refunds for trips that were cancelled, postponed or disrupted due to COVID-19. Holidays months and even years in the planning could no longer proceed. What would have been times of great joy, excitement and happy memories unfortunately turned to stress, panic and financial loss.
As an example, I recently met with a constituent whose trip to Europe in March last year was quickly turned into panic as the rapidly escalating COVID-19 outbreak, particularly in Italy, saw their trip disrupted and led to them ending their holiday and having to purchase their own flights back home. Even after all this time and after raising their case with the ACCC, Fair Trading and NCAT, they are still fighting to recoup their losses for a holiday that wasn't able to happen. The financial toll is one thing, but the emotional and mental impact these types of experiences have on individuals is equally, if not more, significant.
It is worth stating clearly, as this motion does, that many of the tourism operators and providers are honourable and reputable and have sought to do the right thing here. I have spoken in this place previously about the hardships faced by travel agents across Bennelong, and I stand by those words and sentiments today. We must create a system that not only insulates future travellers from future upheaval but also gives businesses the certainty that they need to survive and the openness to maintain the faith of their customers.
It has been pointed out that Australia is fairly isolated and outdated in our consumer laws in this area. In the EU, for example, anybody who has a flight cancelled or delayed by 90 minutes, which can't be rerouted, is automatically provided with a full refund. Similarly in the United States, any cancelled flight results in an automatic refund of the cost. Creating similar laws here shouldn't be too difficult.
We are rightly proud of the consumer protections in this country. They are seen as being beneficial to business and beneficial to consumer confidence. If there is one thing that could give our struggling travel industry a shot in the arm, it is an injection of consumer confidence. Enacting these laws could provide the confidence that Australians need to get travelling again and get our travel companies back on their feet.
The travel and tourism industries obviously remain in dire straits. Among other problems, thousands of Australians are still chasing refunds for holidays that were cancelled because of the COVID-19 pandemic. Indeed, my office continues to be approached by constituents who are struggling to get their money back for flights and holidays booked more than 12 months ago. Compounding these problems for consumers is, of course, that Australian legislation does not guarantee refunds when travel is disrupted due to external forces such as border closures. In other words, whether it be airlines, travel agencies, tour companies, cruise lines, rail companies, wholesalers, package holiday companies or travel insurance providers, there are simply no laws in place to protect consumers. That is why I'm supporting this motion by the member for Menzies.
On top of the physical and emotional stress of the pandemic, the financial burden experienced by many Australians over the past 15 months or so has been enormous, most obviously from job losses, reduced work hours and difficult trading conditions. But it's also included purchases not honoured, especially in the travel and tourism sectors. One particular constituent was given no choice but to accept a $15,000 flight credit voucher valid for just 12 months and with limitations on the way the credit could be used. For instance, only one trip can be booked at a time and that trip must be taken before another can be booked. So, by my calculations, the constituent would probably need to go on at least one trip per month in order to spend this amount in domestic airfares. While that might sound lovely to some people, in reality it would be entirely impractical and end up costing far more in accommodation et cetera. It's ridiculous. Another constituent has been chasing a refund through Jetstar or, as he calls it, 'theft star'. The flight was booked via Flight Centre. For over 12 months the man was told he was ineligible to receive a credit for his flight and no credit for the additional baggage fees. Only last Friday, after 12 months, and countless calls and emails, did he finally receive the flight credit.
Obtaining a refund has been especially hard for the vulnerable in our community. For example, Australians without internet access or the knowledge of how to follow up on travel cancellations have been severely disadvantaged. There was the elderly couple who approached my office that were offered a credit for a cancelled flight even though one partner is very ill and unlikely to ever travel again. Yes, in this case, the credit has now been extended for a further 12 months and they have been told other family members can use the voucher. But this is not good enough, because this couple should be entitled to a full refund without having to fight for their rights.
The big companies are letting people down. It is not just flight cost refunds that consumers are chasing. For instance, some service providers are also refusing or unable to repay clients as they have already used the cash to keep their businesses alive. Currently, the ACCC states that consumers' eligibility for a credit or refund depends on the terms and conditions of their purchase, but how often does someone read every word of the Ts and Cs? Even if they are provided to customers before confirmation of booking, as stated in this motion, there still need to be further consumer protections. Sure, few people would have predicted the impact of COVID-19 on travel and tourism, but the bottom line is that the current consumer laws just don't cover it and that needs to be remedied.
Mind you, there are obviously two sides to this matter, because, to be fair, travel agents are doing it tough as well, not least of which because often the outstanding money consumers are seeking is actually being held by downstream service providers who don't always want to cough it up. The significant time it takes travel agents to help consumers obtain their refunds is not paid work for the travel agents. That's all against a backdrop of almost no lucrative international travel booking income for those businesses. That is why reform of the travel industry is just as necessary for travel agents as it is for consumers. Consumers and often their travel agents are being hung out to dry here, but the situation can be remedied. That's why I strongly support this motion and trust the government will pay attention and act on it.
It's a great pleasure to be able to speak on this motion moved by the member for Menzies and also after the contributions of the member of Bennelong and the member for Clark. The experience that I have had as the member for Goldstein, as I'm sure many other members have throughout the past year, is of many constituents who, through no fault of their own, booked travel arrangements, flights, accommodation, operations, tours et cetera overseas, or even within Australia, but suddenly found their arrangements abruptly cut short as a consequence of the COVID-19 pandemic. Particularly there have been issues around insurance and the pandemic exemptions, but also a lot of constituents are finding it very difficult to get refunds and/or even credits in some cases—or usable credits, I should say, more correctly—for bookings that have been made.
In particular, I'd like to reiterate the point the member for Clark raised. Firstly, travel agents often are the meat in the sandwich, for want of a better phrase, between the consumer and the travel operator and have been unfairly maligned. I have a lot of travel agents within the Goldstein electorate who do an excellent job every day in helping Australians realise their travel dreams, but they are often only the booking agents and, of course, take a fee, because that's how they have their business model running, but often are required to pay money internationally or domestically are the ones responsible for recouping that money in the time frame. It's particularly common when money goes overseas and people are making bookings in Australia for services overseas and recouping that money or, in the case of many tour arrangements where credit may be offered but they may expire within a time frame, as we're experiencing right now—for instance, a 12 month time frame, which means that people aren't able to use them, because of the continued closure of international borders.
So there's something that needs to be done in this space. I have spoken to the Chair of the ACCC, Rod Sims, in our economics committee hearings and asked him what he thinks needs to be done. He has actually made the comment that he doesn't believe a lot needs to be done. What we're seeing in the parliament is that that isn't enough or that isn't acceptable. There is an expectation that there has to be some sort of rebalancing to protect the rights of consumers and their choices and also make sure that they're not taken advantage of or, when their money is taken, there is a sense of responsibility that flows through with it. Many of the travel agents I speak to about constituents who complain about not being able to get their money back often are dependent on the actions of others. From this experience, there needs to be some sort of understanding, obligation and contractual arrangements into the future where travel agents expect obligations to flow through and to make sure that operators do the right thing by customers so they don't get left in the middle.
But I know, as many members will, that throughout the past 12 months many people have made these bookings and sought consumer protections on the simple basis of expecting either their money to be refunded or, as I said before, some sort of credit, and have found themselves either in Australia or overseas essentially giving up because the volume of money, while perhaps not being insignificant, actually is placing an emotional burden on themselves to try to recoup it. In many cases people, of course, even got those credits but are not able to use them.
So I think it's critically important that we look at consumer protection and have a proper analysis of what it means in a potential age of future pandemics but also around the general operation of consumer protections from disruption. I know this is a big issue for the insurance industry. This is not just because of general exemptions associated with pandemics but also because of other aligned issues like business interruption and the need to do so. Of course, the Morrison government has been very aware of the impact this is having on many small businesses, particularly around issues of cash flow when they're required to make reimbursements for people seeking to recoup their money. That's why we've provided support to the travel sector, whether it's directly to the providers or, in addition, to many of the travel agents. But that's really only to carry them over the bridge, as we used to call it; it doesn't solve the fundamental woes that sit at the heart of it. They have been stretched by trying to meet their obligations to consumers. We need proper and responsibilities placed on those who book services to make sure that actions are properly taken, but it does require review. It does require some form of inquiry to properly address.
[by video link] It's a pleasure to speak on this motion today. As many members have already said, I have heard through this pandemic of many consumers who were ready to take the trip of a lifetime when this pandemic hit and who since it hit have had to deal with the fact that that trip of a lifetime didn't come off and with the difficulties of refunds and cancellations that sometimes exist in this space. I have also spoken a lot with travel agents, who have dealt with the entire disruption of their business and who have worked so hard in so many cases to support people who had bookings with them and deal with a change that happened overnight through no fault of their own, through no decision that they made, where essentially their business has been turned on its head. So there is no doubt that, from both a consumer point of view and a travel agent point of view, COVID has upended the travel industry. It is entirely appropriate that, as members, we look at what that means for both travel agents and consumers and at how, hopefully coming out of this pandemic, we can build a system that works strongly for everyone.
I do know, from talking with travel agents in my electorate about what's been happening to them during this time, that many of them have gone through significant hardships, and I want to really thank them for their efforts and their stoicism and for the support they have given to consumers. The travel industry was not a system that was designed to work backwards, and I know that, in the days after shutdown, travel agents were desperately trying to work out what information they had, what advice they could follow, and what outcomes they could provide for consumers, and that has meant that consumers have had differing outcomes. It's been really stressful for consumers. As I said, many of them were looking forward to the trip of a lifetime. They'd spent a lot of time planning and had spent a lot of money, and they were left with no idea of how or exactly when they would get refunds.
As the pandemic went on, some of the confusion continued for both consumers and travel agents, and there were communication breakdowns and, in some cases, unfortunately, conflicting information. I think that's been really hard for consumers. There are many agents who acted with integrity and fairness and who have gone over and above to obtain refunds for their clients, in some cases refunding money from their own accounts. Other consumers have lost money or have been left frustrated, as I said, in being able to get clear information about what's happened and what their recourse in this situation is. I do know there are still people who are waiting for refunds and how hard that must be for all those people involved.
I want to particularly thank Linda and Darryl Wallace from Eltham North in my electorate, who came to me to share some of the frustrations and disappointments that they've had in this space. They were some of those people who'd booked the trip of a lifetime and who had spent a lot of time planning but who then not only had to give up that experience but felt they had to spend a lot of time looking at why they were refunded for some parts of their trip and not for other parts. They had to try, own their own, to figure out what had happened and where transactions were sitting. Their hope is very much that, going forward, there will be a system in place that resolves some of these issues. As we have heard from other members who have already spoken to this motion, a system in place that resolves some of these issues will hopefully be in the best interests of both consumers and travel agents. It means we rebuild a system that consumers feel confident to use and that travel agents feel doesn't provide them with a level of confusion that may be preventing them from doing their work at the moment.
So, while there are parts of this motion that, from a practical standpoint, would need to be worked through, such as the use of trust funds, I do support any motion that would assist travel agents and consumers. We know that this outbreak has challenged the industry like never before, and this is the opportunity for us to build back better to make sure there are consumer protections in place and that we support travel agents, who are desperate to see for positive outcomes for their clients. So I support this motion.
I rise to speak on the motion put forward by the member for Menzies. The travel and tourism industry has been impacted profoundly by the pandemic. Holidays and travel plans were cancelled en masse and some consumers have struggled to obtain refunds for their bookings. I have heard from many travel agents in my electorate about how hard they are working to obtain full refunds for their clients. While I acknowledge that a delay in refunds is not ideal, the impact of the pandemic on this sector has been so devastating, and I understand the call for changes to be made.
From the evidence that my office has received, the majority of those who made bookings via a travel agent have received refunds quicker than those who made bookings online or directly with some airlines or providers overseas. A constituent did contact me asking me to support the petition that led to the development of this motion. While I appreciate the struggles of consumers to get their refunds, I believe that the vast majority of travel agents are working very hard to secure refunds for their clients. The government recognises effort and the need to support travel agents to obtain refunds through the establishment of the consumer travel support grant. I welcome the extension of that grant to phase 2. Now that the government has declared that the borders will remain closed until mid-2022, I urge the minister to consider developing a long-term plan for this sector to support travel agents through this difficult time. A one-off grant every three months without certainty of whether there will be another grant in three months time is no way to operate a business. It does not provide the certainty that these businesses need to continue to employ staff and to fight for the refunds for their customers. We will lose so much expertise and work experience if all these businesses close.
In March I hosted a roundtable with the travel agents of Warringah. The Australian Federation of Travel Agents attended. The forum raised several issues faced by Warringah travel agents—and I suspect it was not unique to Warringah. Border closers, domestic and international, and lack of certainty around when they will reopen are major issues for people planning. There is perceived misunderstanding of the role of travel agents and the need for them to support the general public. There are difficulties with the viability of domestic bookings to sustains travel agents due to a lack of availability of domestic accommodation and tour operators and an inability to take commissions on domestic airfares. The minister has repeatedly said that his solution around domestic travel would solve this sector. It does not. These travel agents are not being assisted and are hanging on for dear life. Some agents and providers are not recognised as travel agents for the purpose of the grant program due to tax classification and so they are left in indefinite limbo.
I urge the government to make a commitment for rounds 3, 4 and 5 of the grants. They need to increase the ceiling of the grants. They need to consider providing the grants as fortnightly payment schemes, similar to JobKeeper, so that agents don't take the money and leave the industry. There is currently a risk of that because it's only every three months. We need grant approval for a number of cruise ships to enter Australian waters to service the Kimberley cruise season. We need to develop a roadmap for opening the borders, considering the vaccine rollout schedule. There have been 14 months now where we have had a closed international border, the only OECD and developed country to have that—the most extreme measure. There must be a long-term plan to ensure that 'bubble Australia' is not an indefinite bubble. There are so many sectors that require the safe reopening of our borders. The first step being that we need a vaccine rollout that is accelerated and we need fit for purpose quarantine facilities.
I have to thank the hard-working travel agents of Warringah and acknowledge the impact of this pandemic on their businesses. I welcome the suggestions for improvements to consumer law, but I caution that any change must be applied to the tourism sector as a whole. You can't be picking favourites. Travel agents cannot bear the brunt of further regulation or change at this point in time. So many of the members of this industry are just hanging on. They desperately need there to be more stimulus and more focus on how their sector, and their knowledge and expertise, can be maintained. At my roundtable I heard so much of staff being let off, so much expertise being lost. When bubble Australia bursts and people do come back here we simply will not have the knowledge or travel agents in operation to service them. I support the motion but I have concerns.
I rise to second the motion that was originally brought forward by the member for Menzies, who unfortunately has been taken unwell. I do wish him a speedy recovery. I'm sure that he will make a speedy recovery. I have seconded the motion because the motion does highlight some of the hardships faced by both consumers and travel agents during this recent pandemic. It gives us an opportunity to reset. The COVID-19 pandemic has very negatively affected countless sectors of our economy. Unlike the Prime Minister, I don't believe that everyone is in this together. There are certainly some sectors that have been affected much more severely than others, and the travel industry is one of those. I, like the other members present, have met with the travel agents from my electorate of Macarthur. I do feel for them, and I thank them for the hard work, often not paid work, they have undertaken to try to ensure consumers are treated fairly. Flights and travel plans have been delayed and cancelled in many instances, and travel agents and consumers have been experiencing financial hardship and significant insecurity about travel during the pandemic.
The pandemic, of course, continues to push back our return to normal travel. It is still very unclear as to when our borders will reopen successfully, because, as we know, this virus is behaving in ways that are still to be determined. The most recent variants appear to be much more infectious and much more transmissible. There is a possibility that the new variants—particularly the double mutation, the B.1.617 mutation—are affecting younger people as well. So it's still very unclear as to when our borders will reopen and still very unclear as to when our travel industry will get back to near normal or pre-COVID normal.
Many thousands of Australian consumers are struggling to retain refunds for holidays they booked through travel agents, despite it being in some of the travel agents' best interests. In my electorate of Macarthur, I must say, every travel agent that I know has behaved in an exemplary manner, but consumers are often struggling to get refunds from foreign agencies and foreign airlines, and many have visited me in my rooms to see what I could do to help them. Two people in particular were two sisters who worked in the education system. They weren't wealthy people. They'd scrimped and saved, had taken their long service leave and had booked an overseas holiday—the holiday of a lifetime—to travel Africa together. They were very much looking forward to it but, for the obvious reasons of the pandemic and our border closures, they were unable to take that holiday. They tried to get refunds. They'd already taken their long service leave. They were given travel vouchers for foreign airlines and foreign hotels, and these are valid until December this year. Of course, it's extremely unlikely, even if they can get some other leave, that they'll be able to take that holiday. I think it's very unlikely that our borders will be open by then. They've asked for refunds, but have been unable to get those refunds, for tens of thousands of dollars.
I feel deeply for these women, and I think it's time that we looked to reset how travel plans work so consumers can get the refunds they are entitled to. This would bring more certainty to the industry. It would encourage more people to book holidays, both inside and outside Australia, and it would enable our system to be much more consumer friendly. Exactly how we redefine the system remains to be seen, but I think the minister and this government should look very hard at how we can refine our travel refund system to make sure consumers are protected in all instances. COVID-19 has had a really negative effect on our travel industry. We must get confidence back and we must allow consumers to feel that if, for reasons beyond their control, they need to get refunds they will be able to get them.
Thank you to the member for Menzies for this motion calling for a better system to protect travel consumers and travel agents. In my electorate on the New South Wales South Coast I have a lot of wonderful elderly people and people getting close to retirement. It's no surprise that, having worked hard all their lives, they now want to travel. They plan meticulously, often with the help of their trusted local travel agent. They pop into their local travel agent and have a chat, and they know that if they have a question their local travel agent is always only a phone call away. That's what it's like in the country all along our coast: travel agents look after their customers and their communities, and customers look after their travel agents. But bushfires, floods and then the COVID pandemic have taken their toll on everyone.
I have spoken often about this in parliament. From very early on, I have talked with many local travel agents. I've seen and felt their pain and their tears. They are working around the clock to process refunds and to look after their clients, not to get paid but because it was the right thing to do. Shayne told me how she worked two other jobs to stay afloat and processed refunds. I listened to Joanne's heartbreaking story when she told me she wished her business hadn't been so successful because now she had to undo each tour, bit by bit. Bob from Gerringong has been a travel agent for over 40 years and said he's never seen things this bad. I met with Emma, Lindy and Jennie. Between them they have almost 100 years of experience in the travel industry. They came to me with suggestions for the future about how things should be made better to protect travellers and travel agents. I have had many, many constituents come to me who had booked travel only to go down the path of trying to get a refund. Most reported not being able to get through to many of the larger online travel providers. Some were eventually given partial credits. I have referred many people to the Australian Financial Complaints Authority. I have written to the minister, but, for many people, there has been little joy.
Kathy came to see me and told me her story. In December 2019, Kathy and her husband paid $23,000 to Travelmarvel which comes under the APT umbrella. Kathy and her husband were going on the trip of a lifetime to Canada and Alaska. However, the tour was cancelled in April 2020 due to COVID-19. Initially they were offered a full credit voucher. However, given their age, health and personal circumstances, they requested a refund. Of that $23,000, they were offered a refund of $17,000, so they requested a breakdown of those irrecoverable costs. They refused to give them a breakdown of the costs, so they went to their insurance company. The insurance company initially refused to refund the gap of $6,000 because they were offered the credit. Kathy sought help from consumer advocate Adam Glezer who suggested Kathy lodge a complaint with the Australian Financial Complaints Authority. Adam was another disgruntled Flight Centre customer turned consumer advocate who is calling for a major shake-up to how customers using travel companies are protected. So Kathy lodged a complaint with the Australian Financial Complaints Authority. In this case, the Australian Financial Complaints Authority ordered the insurance company to pay the gap, which they did. Overall, Kathy and her husband did get their money back eventually, but it took a lot of work over a long period of time. And, as Kathy says, a lot of other people would have given up.
What is clear through this terrible ordeal is that customers and agents need better protections. If this can be done overseas, then so too can it be done in Australia. Consumers should have a right to a refund if the service they paid for hasn't been fulfilled due to situations outside of human control. There should be mandatory trust accounts for all travel agents, including online travel agents—and many of my local travel agents have raised this—so that customers are protected. There should be greater transparency around fees for service, so that there are no hidden costs, and travel agents should ensure that supplier terms and conditions are provided to customers.
I hope to see many of my constituents travelling again soon with their local travel agents, but we need better protections for all.