Cancellation clauses – Check your T&Cs!

While we’re all navigating the grey waters of the Consumer Protection Act, inevitably there are going to be instances like the one we encountered last week that leave us scratching our heads…

The case last week saw a consumer taking an ASATA member to the National Consumer Council (NCC) after cancelling a trip on his doctor’s advice. The consumer, who refused at the time of booking to take out cancellation insurance, is now referring to Section 17(5) of the Act that addresses the consumer’s right to cancel if hospitalisation or death occurs; neither of which in this particular case was relevant.

Goldman Judin’s Gareth Cremen sheds some light on the situation for us:

One of the problem areas in the Act is section 17(5) which says that a supplier cannot charge a cancellation fee in respect of a booking, reservation or order if the consumer is unable to honour the said booking, reservation or order due to death or hospitalisation.

The fundamental rule of interpretation of statutes is that where the meaning of any provision is clear and unambiguous, that meaning must be accepted. It is clear that section 17(5) does not cover “ill health” and one cannot simply read this in. If a consumer is unable to honour a booking, reservation or order due to ill health and has a doctor’s note advising the consumer that they cannot travel then they cannot rely on section 17(5) as it does not give the consumer protection.

You will however get consumers who will abuse any process possible and report any of the suppliers (including the travel agency) to the NCC. Travel insurance usually covers cancellation of bookings etc, but the problem is that consumers often refuse to take out travel insurance.

In this scenario, the consumer should not succeed with reporting the suppliers to the NCC. However, there is always a degree of risk involved and I suggest that all suppliers in the travel industry incorporate provisions on their booking forms and terms and conditions which cater for this type of scenario.

Because I’m worth it… The service fee debate

There were some interesting findings in research conducted by the University of Pretoria’s Professor Berendien Lubbe and colleagues on service fees. You may recall ASATA asking you for input on the topic recently.

Other than the obvious finding that consumers remain unaware of the value attached to travel agent services, the study makes an interesting suggestion: Differentiate your service fees based on the level of knowledge of consultants, the quality of services rendered and the level of customisation required by the consumer.

The report didn’t survey the end consumer. Rather it looked at agents perceptions of the service fee situation so it does have its limitations, but it remains fascinating that consultants don’t believe consumers value their role in straightforward consultation, whether it be for domestic or international travel. Consumers don’t necessarily understand the value of time saved and specialist knowledge provided by agents.

Ironic when you consider we keep getting told agents need to reinvent themselves and become ‘consultants’ providing expert knowledge of destinations, value-added quality service and cater for customised needs.

The agents who took part in the survey ASATA sent out on behalf of the University of Pretoria apparently believe consumers value and are willing to pay for the traditional services of assisting with visa arrangements, group bookings and issuing flight documents.

The report also profiles the type of customer more willing to pay for travel agency services: men more often than women, between the ages of 35 and 55 years, falling within the categories of highly qualified and higher levels of information.

Interestingly, only about half of the agents who participated in the study, said they explain to customers why certain fees are charged, which could point to the unwillingness of consumers to pay service fees.

The report advocates informing your customer about the value of the service you provide and advises owners to solicit input from their consultants when structuring service fees because they are the main contact point between the travel agency and the customer.

Finally, the report cites the three greatest challenges to determining what service fees are charged: Assessing the indirect cost of a service to the travel agency; assessing the cost of the time spent with a customer and assessing the prices that competitors charge for similar services.

What’s all this talk of TOMSA?

Your verification agency may have asked you if you are a TOMSA levy collector and if not told you that you are losing out on earning points towards your BEE Scorecard. But what is it? Other than another travel acronym to add the long list, you may think.

TOMSA (Tourism Marketing Levy South Africa) is a private-sector initiative aimed at raising funds for the marketing of destination South Africa. Levy collectors range from accommodation establishments, tour operators and even car rental agencies, in fact any other companies whose core business is focusing on facilitating arrangements for inbound tourists visiting South Africa.

The levy is voluntary and collected by the Tourism Business Council of South Africa (TBCSA) and is given to South African Tourism to fund their extensive marketing commitments to promote South Africa as a tourist destination.

South African travel agents currently are not TOMSA levy collectors and hence ASATA Members are not required to contribute to the fund. ASATA Members are primarily involved in facilitating travel arrangements for South Africans whether it is for their corporate or leisure activity. For their domestic travel arrangements those travellers will pay the TOMSA levy in their capacity as a guest of the hotel, guest house, ground transport operator and or other companies in the supply chain.

In March the TOMSA Board agreed to extend their levy collector base to travel agents and other Tourism industry partners but no indication has been forthcoming as to the amount to be collected and ASATA has a concern that this would in fact be a double whammy for our customers as they would be paying the levy when they stay at most local hotels.

There is no doubt that we would support initiatives that encourage the promotion of South Africa but are cautious about burdening our customers with any further taxes or levy’s at this time!

If you need a letter explaining this position to your verification agency, please send a request to general@asata.co.za