Only 12-13% of those who cancelled travel bookings due to 2nd COVID wave got timely refunds; 90% want Govt to come up with a travel cancellation refund policy till the pandemic is on

August 9, 2021, New Delhi: The 2nd wave of the COVID-19 outbreak that reached its peak in April and May forced many citizens and families to cancel their travel plans. At the time, many citizens reported on LocalCircles about issues they faced when trying to cancel tickets and hotel stays for their booked summer travel. Some travel agents (online and offline), airlines as well as hotels did not initiate any refund with people losing the complete booking amount. While some were able to retrieve a partial amount, others were asked to rebook the flights and hotel stays for a later date. It eventually prompted the Ministry of Civil Aviation in April to hold meetings with representatives of airlines in connection with refund of credit shells of passengers. Some airlines waived off change fees on domestic flights, while some others provided free cancellation and rescheduling of flights. It can be recalled that during the lockdown in 2020, the Supreme Court had ordered the airlines to refund the full amount of the ticket within 15 days. Only the carriers that were under financial distress were ordered to provide a credit to the flyers that can be redeemed later.

These efforts may not be enough considering the uncertainty that lingers for citizens. According to a media report, a Parliamentary Committee has told the Aviation Ministry about the need for rationalising cancellation charges and prescribing an upper limit that can be collected from passengers, along with a need to look at the entire structure on how airport concessions are given. LocalCircles has also received a lot of feedback from citizens, suggesting a need to regulate cancellation charges by airlines, trains, hotels and others atleast during the COVID pandemic. Taking cognizance of the issue, LocalCircles has conducted a survey to gauge the magnitude of the issue that people faced with travel cancellation refunds due to the 2nd COVID wave. It also sought citizens’ pulse about the need for the Government to come up with a cancellation policy that applies to airlines, railways, hotels, and others till the time the COVID pandemic continues. It also sought their perception on what would constitute a fair and fast refund against cancellation of tickets due to COVID restrictions or risk. Over 37,000 responses were received from citizens located across 359 districts of India. 64% respondents were men while 36% respondents were women. 47% respondents were from tier 1, 30% from tier 2 and 23% respondents were from tier 3, 4 and rural districts.

Of those who cancelled summer flight tickets due to COVID 2nd wave, only 12% received a full refund from airlines/travel agents

The first question in the survey sought to understand the challenges citizens faced to cancel their bookings for their flight travel plan for the summer. It asked those who had made the bookings and decided to cancel about their refund experience. In response, only 12% said “travel agent/airline accepted cancellation and refunded full amount”. Breaking down the poll, 32% said “travel agent/airline did not refund anything, and we lost the ticket amount”, 12% said “travel agent/airline accepted cancellation but refunded partial amount”, and 4% said, “travel agent/airline accepted cancellation and refunded a small amount”. There were also 24% of citizens who said “travel agent/airline did not refund anything but rebooked the ticket for a later date,” while 16% did not have an opinion. This question received 8,713 responses.

Some airlines claimed to have waived off change fees on domestic flights amidst the 2nd wave, while some others say they have provided free cancellation, policies of two of them have been unclear to consumers.

Of those who cancelled summer hotel bookings due to COVID-19 second wave only 13% viable to get off full refund from hotels/travel agents

The next question sought to understand the booking cancellation and refund experience for hotel stays. When asked “For the hotel stay(s) that you had booked for travel during the summer, how did the cancellation process work?”, only 13% said, “travel agent/hotel accepted cancellation and refunded full amount”. Breaking down the poll, 44% said “travel agent/hotel did not refund anything, and we lost the booking amount”, and 17% said “travel agent/hotel accepted cancellation but refunded partial amount”. There were also 13% of citizens who said that “travel agent/hotel did not refund anything but rebooked the stay for a later date”, while 13% couldn’t say. This question in the survey received 8,594 responses.

90% citizens want Government to come up with a special policy for travel booking refunds till the COVID pandemic is going on

Citizens have regularly been demanding intervention by the Government to come up with travel booking cancellation refund rules as long as the COVID pandemic is going on. Many citizens raised the issue about factors beyond their control also come into play during the pandemic and as a result the only option for them being cancellation of the booking.

The next question in the survey asked citizens if the Government should come up with a special policy that applies to airlines, railways, hotels, others during the COVID pandemic that enables fair and faster refunds in cases of lockdowns and cancellations. In response, the majority of 90% of citizens said “Yes”. Only 3% said “No”, and 7% did not have an opinion. This question in the survey received 10,633 responses.

The citizens via the community discussion on LocalCircles suggested that such a policy could be brought by the respective ministries like Civil Aviation, Tourism and Railways or by the Ministry of Home Affairs under the Disaster Management Act 2005.

Only 5% citizens approve of the existing travel booking (flight, train, hotel, etc.) refund policies during the pandemic while majority wants changes

Currently, companies operating flights, trains and hotels have their own set of rules concerning the cancellation of bookings and refunds. As evident from the first two polls, during the COVID 2nd wave, most of the travel agents or the airlines and hotels did not initiate any refunds, and many citizens lost the complete amount. While some were able to retrieve a partial amount, others were asked to rebook for a later date. The following question sought citizens’ pulse on what according to them would constitute a fair and fast refund in case they have a travel (flight, train, hotel, other) booking and have to cancel it due to COVID restrictions or risk. In response, 3% of citizens said there should be an “immediate refund with up to 50% value deducted as processing charges”. Breaking down the poll, 21% of citizens said there should be “refund within a week with up to 20% value deducted as processing charges”, 30% said “refund within a month and up to 10% value deducted as processing charges”, and 6% said “refund within 6 months and up to 5% value deducted as processing charges”. There were also 21% of citizens saying that there should be “no refund but a voucher for the full amount to be used towards future travel within 2 years”. 8% voted for “other model”, and 7% did not have an opinion. Only 5% of citizens approve of the existing travel booking (flight, train, hotel, etc) refund policies during the pandemic while the majority wants changes. This question in the survey received 9,662 responses.

Based on the survey results, the best-case scenario could be giving people the option of a) Get a refund within a week and 20% amount to be deducted as processing charges, b) Get a refund within a month and only 10% amount to be deducted as processing charges or c) No refund but a voucher for full amount issued which can be used towards future travel within 2 years. This way, travelers have the confidence that their losses will be limited in case they were faced with a cancellation situation due to the pandemic.

In summary, only 12-13% of citizens were able to get a full refund for the flight and hotel booking cancellation due to the 2nd COVID wave. 95% of citizens believe that the current policies of the airlines, railways or hotels are not in consumer interest and 90% want the Government to come up with a travel booking refund policy till the time the COVID pandemic is on. The same could be brought by the respective ministries like Civil Aviation, Tourism and Railways or by the Ministry of Home Affairs under the Disaster Management Act 2005. People have also suggested a 3-option traveler-friendly travel booking cancellation and refund policy.

LocalCircles will be submitting the findings of this survey with the key stakeholders in the Central Government so the same can be used as an input in decision-making in regard to formulating a uniform policy for travel booking cancellation refunds during the COVID pandemic.

Survey Demographics

Over 37,000 responses from citizens located across 359 districts of India. 64% respondents were men while 36% respondents were women. 47% respondents were from tier 1, 30% from tier 2 and 23% respondents were from tier 3, 4 and rural districts. The survey was conducted via LocalCircles platform, and all participants were validated citizens who had to be registered with LocalCircles to participate in this survey.