Covid 19 coronavirus: House of Travel charges 10 per cent on 'cancellation' of overseas holiday

A New Zealand couple have been stung by hefty travel cancellation fees because of Covid-19.

John and Maxine Robson paid $28,169 for a seven-week holiday to North America starting in New York in mid-June, taking in tours in Canada and stopping off in Hawaii on the way home.

But with the coronavirus pandemic halting international travel, the retired Tauranga couple were offered either a credit, or refund minus a 10 per cent cancellation fee from House of Travel.

The cancellation fee is included in House of Travel's booking confirmation fine print but there's no specific reference to cancellations that come about when the travel cannot be supplied.

House of Travel customer engagement director Celeste Ryall said the company could not comment on individual customer circumstances.

"Our priority is and always will be our customers and we are working through every case individually to determine what options are available for our customers, including credits and refunds which are constantly being updated by suppliers.

"We are continually reviewing our procedures and policies while this unprecedented situation develops."

The Robsons' travel credit came with a $300 rebooking fee but Maxine said they already had more travel booked next year and preferred the refund.

It means House of Travel will deduct $2820 in cancellation fees, despite the cancellation not being the fault of the couple.

It also told the couple their Air New Zealand flights to and from the US were non-refundable.

But on Friday, after the Herald made inquiries with Air New Zealand about a couple who couldn't get a refund on $11,800 premium economy flights to London via the US, the airline stumped up all the cash instead of a credit.

That was because flights to or via America are covered by the US Department of Transportation regulations.

Ryall did not answer questions about why the Robsons were not entitled to flight refunds since their flights were to and via the US.

However after the Herald made inquiries a travel consultant emailed Maxine stating:

"I have heard that Air New Zealand are considering changing their policy on providing refunds for travel to, from and via the States. I have not received confirmation of this from Air New Zealand but will be in touch as soon as I have this."

Last Wednesday when the Herald revealed Flight Centre was charging cancellation fees, that company capped its fee at $700.

Maxine Robson said the situation was unfair.

"Look after your customers ... don't charge us a fee for a holiday we're not getting."

When the Robsons complained to House of Travel, their consultant told them suppliers were only providing full refunds after the travel agency pressured them.

"However ... they're not publicising the fact that they're not protecting the travel agent's commission - so in effect we've incurred all of the costs and we're no longer being paid by them," the consultant wrote in an email on March 26.

"House of Travel have reviewed our current position regarding amendment and cancellation fees, and we will continue to charge these as per our terms and conditions.

"And it is our understanding that the other travel agency chains are experiencing similar challenges, and also appear to be maintaining full cancellation and amendment fees as per their terms and conditions as well."

Despite the partial back down by Flight Centre, Stuart Douce said he still intended taking it to the Disputes Tribunal to get a full refund on his holiday to Thailand. Photo / Supplied

But Consumer NZ chief executive Jon Duffy said they had received a number of complaints about House of Travel's extremely high cancellation fees for Covid-19 affected travel.

"House of Travel's policies seem particularly onerous, including the retention of any non-refundable deposit, and the retention of a minimum 10 per cent of the total cost of the booking as a penalty for cancellation," Duffy said.

"In some cases this penalty can run into several thousands of dollars. We think that travel agents should be waiving their fees in situations where the cancellation of travel is not the fault of the consumer."

If that wasn't an option he said any fees should be capped to "reasonable costs" incurred supplying the service.

In one case he said it appeared House of Travel had retained almost 25 per cent of the total booking price.

"This seems unreasonable and could amount to a breach of the unfair contract provisions of the Fair Trading Act.

"We are also concerned that House of Travel staff may be providing confusing information to customers around their ability to obtain refunds rather than credits for flights to the US, which are refundable."

House of Travel is a member of Travel Agents' Association of New Zealand [TAANZ], a self-regulating trade organisation.

Chief executive Andrew Olsen said members should make sure cancellation fees are upfront and represent a fair and reasonable amount for the work the agent has undertaken.

"Given the current circumstances, fees reflect the work the agent has already done to arrange the booking initially, as well as their knowledge, expertise and value, and then additional work to rearrange plans as a result of Covid-19."

He said of the tens of thousands of travellers impacted by the pandemic, only 20 had complained to TAANZ and each complaint was being investigated.

• Covid19.govt.nz: The Government's official Covid-19 advisory website