Need to know
- Cruise line customers are entitled to whatever refund is outlined in the terms and conditions of their agreements
- Many customers we've heard from say they were promised refunds that have yet to come through
- Future cruise credits that expire at the end of 2021 could see customers caught in a 'no-refund' loop
According to an industry insider who got in touch with us in early March, the cruise ship industry had somewhere between $700 and $800 million in Australian bookings sitting with cruise companies around the world when cruising came to a stop in early 2020.
With COVID shutting down travel, many Australians who handed over those dollars never boarded a vessel or got their money back, and many are still trying.
'We may never get this chance again'
About $10,000 was paid by Christine and her partner, one of the 4443 respondents to a travel cancellation survey we ran earlier this year. (The payment was for a cruise package including accommodation and flights.)
She had travel insurance before she booked, but she still hasn't got her money back.
"We are both age pensioners, 77 and 83 years old," Christie told us. "It was to be the trip of a lifetime as neither of us have ever been on a cruise. We have never spent that amount on a holiday and the money had been left to me on my mother's death. We may never get this chance again."
They refused to give us a breakdown of where money went. We had an automated response to our last email with no reply afterwards
Cruise customer Cathy
Both have health problems that make mobility increasingly challenging.
Irene booked a cruise from Singapore to London for her 80th birthday as part of a larger tour. Then COVID-19arrived and travel was off the cards. Irene also had travel insurance but has yet to receive a refund. She describes the process of trying to get one as "impossible and extremely stressful".
Cathy's in the same boat, so to speak. She had two cruises lined up with MSC cruises and paid a $7000 deposit for the first one. She says she's had "minimal replies, nor any monies returned from them whatsoever".
"We had a rude reception from cruise staff, who were very unhelpful," Cathy says. "They refused to give us a breakdown of where money went. We had an automated response to our last email with no reply afterwards."
Many customers whose cruises were cancelled are worried they won't be able to sail before their credits expire.
Cathy* tells us she booked with Princess cruises for a May voyage with friends down the south coast of WA in January 2020.
"We received an email saying we would get a full refund plus a credit for the hassle but have yet to receive either," she says. She too has travel insurance, but it would only cover a quarter of what she's lost. She's still waiting for the refund. (*Not her real name.)
John, who had five cruises booked back to back, is $30,000 out of pocket.
In some cases, however, cruise lines did the right thing, setting a standard that few seem to have followed.
Future cruise credits – are they usable?
On paper, at least, the refund policies for the cruise lines depend on the length of the cruise along with other factors. Generally, the farther out before departure that you cancel a cruise, the more likely you'll be entitled to a refund.
As the departure date approaches, you'll likely get less and less of your money back.
Despite what the policies say, however, many customers are still waiting for whatever refund they're entitled to.
Clients may still be holding [credits] that are going to expire soon… such as by the end 2021, when no sailing is likely to occur
The alternative to a refund is a future cruise credit, or FCC, which nearly all cruise lines are offering.
But there's a problem, the industry source says: "When the credits were issued, communication was patchy and not all Ts and Cs were visible to the consumer when they signed up. The time frames to use the credits were short."
"Clients may still be holding FCCs that are going to expire soon or may be applicable to a short window, such as by the end 2021, when no sailing is likely to occur," the source continued. "We have seen some cruise lines extend these, but it is not uniform."
Further cancellations
Customers who have already traded in their credits for a cruise scheduled this year could be looking at further cancellations, the source says.
"So there will be cancellations on new trips, and many cruise lines are not offering refunds on these trips. The only remedy is for another future cruise credit.
"There will be consumers who feel like they didn't have full visibility of the Ts & Cs at the time and are now caught up in a 'never refund' option with some cruise lines."
Customers of cancelled cruises have been subjected to extensive runarounds when trying to get their money back.
What the regulator says
The Australian Competition and Consumer Commission (ACCC) says the terms and conditions in your cruise agreement dictate your rights, but adds that the Australian Consumer Law is "unlikely to apply to cancellations as a direct result of government restrictions. This may impact the remedies available to consumers".
But our survey results suggest that not all cruise lines are honouring their Ts & Cs, at least not in a timely fashion.
If you're cruise had been cancelled
- The ACCC "expects that consumers will receive a refund or other remedy, such as a credit note or voucher in most circumstances".
- If your Ts & Cs or the business say you had a right to a refund when you booked, the cruise line must honour this.
- Keep any communications with the business and contact them directly to request a remedy. This may be a refund or credit note or voucher, depending on your circumstances.
- Future cruise credits should have an expiration date long enough to allow you to use them.
Making travel credits fairer
Many travel providers have offered credits or vouchers in lieu of what their customers were hoping for – an actual refund.
At the moment, the terms and conditions of these credits vary from provider to provider, and some will likely expire before they can be used. As part of our call for a cleanup of the travel industry's approach to cancellations, we've laid out what we think should be the minimum requirements for all travel vouchers, regardless of who issues them.
- A minimum term of three years before expiration.
- The ability to transfer the credit or voucher to another person.
- The ability to split credits over multiple bookings.
- An obligation on travel and tourism businesses to convert credits or vouchers to a refund in certain circumstances including at the expiration of the term.
- An obligation to treat bookings made with credits or vouchers in the same way as bookings paid for in cash.
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