Updated April 9, 2020 to reflect the U.S. Department of Transportation Enforcement Notice
Short version: If a U.S. airline cancels your flight then you are entitled to a prompt refund. When able wait for the tour provider to cancel!
Please feel free to contact Rick (email@example.com) if you have any questions.
A General Note About Non-Refundable Bookings
Many travelers choose to make non-refundable deposits and/or bookings becuase that is the only option offered by the provider or because the cost-savings is usually significant. This is particularly true for travel by air where a refundable ticket may cost multiples of a non-refundable ticket. Terms & Conditions are usually not an all-or-nothing proposition as changes or future travel credits are sometimes covered by travel protection or made available by the travel provider for a fee. Know what you are booking by reviewing the Terms & Conditions!
If the Travel Provider Cancels
You usually have more options, as outlined in the provider Terms & Conditions, if the travel provider initiates the cancellation! The cancellation may be due to equipment malfunction, weather, global pandemic, local staffing issue, or any other malady. If the provider cancels then you usually have the option to receive a complete refund.
The most recent Global Coronavirus pandemic proved this in spades. If you are not able to utilize your reservation because the airline, cruise company, hotelier, or other provider cancels then you should request and receive a refund! Again, check your Terms & Conditions!
Bonus Credit versus Refund
There are examples of travel providers offering bonus travel credits when a refund is warranted due to a cancellation event. You should only consider taking the bonus credits over a cash refund after considering all of the following:
- How confident are you in your ability to fully utilize the travel credits before they expire? Expiration dates are key as are policies about who is able to use. Most credits are only applicable for the original named passenger.
- How confident are you in the financial viability of the travel provider? If the provider goes out of business before you have redeemed your credit then you may never get any travel or monetary value out of your credit.
If you have high confidence that you will be able to utilize the credits before they expire and that the provider will remain in business then you may want to consider opting for the bonus future credits.
Note that some U.S. airlines are resisting their obligation to provide a cash refund option when they are cancelling flights. They are only offering future travel credits and refusing full refund requests. This is in violation of U.S. Department of Transport guidance as affirmed in an Enforcement Notice published on April 3, 2020. If a U.S. flight is cancelled you are entitled to a prompt refund!
There are additional cases where it does not matter what the airline says or wants, especially if there is governing legislation, particularly for air travel to or from the European Union. The applicable governing law, EC261/2004 states, in part that passengers on cancelled flights are entitled to:
“Reimbursement within seven (7) days of the full cost of the ticket at the price at which it was bought”
There is no mention of an airline being able to opt-out of this provision due to a global pandemic or weather. If your EU flight is cancelled you are entitled to a prompt refund!
Know and reference the applicable regulations when you make your refund elections and requests.
A Recap of Recommendations
- Refer to your travel provider Terms & Conditions
- Know the deadline to cancel or modify your trip
- If you are already in your cancellation window then wait for the provider to cancel — if they do then immediately request a full refund or take advantage of any bonus credit
- If you in your cancellation window and approaching the deadline to receive a future credit and you plan to use the credit then you should initiate the cancellation request to preserve the credit