CHOICE proposes industry reforms

CONSUMER group CHOICE last month wrapped up a long-running investigation into the practices of the travel sector, releasing a major report based on feedback from thousands of consumers about their experiences through the COVID-19 pandemic.

The report proposes a number of reforms “to improve consumer protections for people who book travel or tourism services that cannot be provided due to circumstances outside the control of the business and consumer,” with recommendations including a mandatory industry code which would apply to all airlines and large travel & tourism businesses which take money from Australian-based consumers.

Also on the agenda is a proposed government-funded Travel & Tourism Industry Ombudsman to manage complaints, governed by a board that includes equal numbers of consumer and industry representatives along with an independent chair. The Ombudsman would “have the power to issue determinations and decisions which industry are obliged to act on,” CHOICE suggested.

CHOICE recommended the introduction of a “mandatory information standard” governing the details provided to consumers at the time of booking – including what refund they will receive if a business is unable to provide a service, information on how to lodge a complaint and, in the case of travel intermediaries, “a breakdown of fees and commissions”. Minimum requirements for travel vouchers and credits should be introduced, with at least three years’ validity, the ability to transfer to another person and to be split over multiple bookings, and an obligation to convert credits or vouchers to a refund at the expiration of the validity term.

The consumer group also suggested the Australian Competition and Consumer Commission should conduct a “market study into the travel and tourism sector” with a particular focus on travel agents and intermediaries, considering issues of competition, independence, contracting practices, pricing transparency and risk allocation through the supply chain.

Flight Centre was particularly singled out in a subsequent follow-up from CHOICE, reflecting a high volume of anecdotal feedback collated during a survey which was used as the basis for the report and recommendations. The consumer group particularly blasted Flight Centre’s $300 cancellation fee – which was eliminated five weeks into the pandemic – as “exorbitant” and “steep”, while the company’s terms and conditions were described as “eyebrow-raising”. A Flight Centre spokesperson told travelBulletin the attack on the company by CHOICE was disappointing and had ignored some elements of a detailed response provided by the company – in particular “an agent’s ability to charge fees for the time they incur in securing refunds”.

Despite some attacks on the industry, there was acknowledgement within the CHOICE report of the difficulties of the pandemic, with a number of survey respondents reporting positive experiences including “travel agents who went above and beyond in their efforts to obtain refunds for their consumers,” as well as businesses which gave refunds even though their terms and conditions didn’t technically require them to.

And the key recommendations of the report have been designed with the express purpose of improving consumer confidence in travel – something that everyone in the industry would agree is sorely needed.