Coronavirus Has Stopped Most of Us From Traveling, but it hasn't stopped many from dreaming of future travel, or in some cases, making concrete travel plans. But given the turmoil and upheaval the industry is going through, we have a few recommendations:
1. Only Make Airline Reservations Using Miles and Points That You Can Afford to Lose
As we wrote in Coronavirus: Tips for Filing Credit Card Chargeback Disputes, U.S. airlines that cancel a passenger's flight are supposed to provide a full refund back to the payment card, and European airlines are supposed to also give the passenger the option of a full refund if the airline cancels the flight, per EC 261/2004 and the European Commission's COVID-19 guidelines. Nevertheless, most airlines are refusing a refund back to a credit card and are only providing travel credit, holding travelers' funds hostage.
For this reason, we highly recommend NOT paying cash for any future flights, and only using frequent flyer miles or points that you can afford to lose (in case the airline and its associated frequent flyer program doesn't survive, or the miles are significantly devalued).
2. Book Hotels and Resorts That Don't Take a Deposit at Time of Booking
If at all possible, steer clear of hotels and resorts that take a deposit at time of booking, to avoid potential problems later on getting your money back, even if you cancel in advance of the cancellation deadline, or worse, the hotel becoming insolvent and not getting your money back.
3. For Hotels That Mandate Deposits, Get the Refund Policy in Writing
If the hotel you're set on requires an upfront deposit, at least get the refund policy in writing. Most hotels, of course, will include the cancellation policy in the confirmation email. But we suggest also getting the hotel to put in an email that, if you (or your travel advisor) notifies the hotel of your cancellation prior to the cancellation deadline, the hotel will refund your entire deposit back to your credit card within X days of being notified. Obviously it can take additional time to reflect on your credit card account, which is out of the control of the hotel, but the point is that the hotel will have initiated the refund within the number of days specified; it's reasonable to expect the hotel to do this within 2 days of notification.
What this seeks to pre-empt is what we're seeing from a few hotel bad actors: repeatedly trying to get the client to reschedule their stay instead of cancelling it, and then saying if a refund is insisted upon, it will take 90 days. By getting the hotel to agree upfront on a prompt refund, this should help avoid needing to file a credit card chargeback.
4. Get Additional 3rd Party Travel Insurance
Even the AMEX Platinum, Chase Sapphire Reserve and the other credit card travel insurance policies we're aware of don't provide trip cancellation insurance for airlines, cruise lines or hotels that go bankrupt; financial insolvency of travel providers is specifically excluded. For this reason, if not willing to self insure (take a loss on prepaid funds that you may lose due to a travel provider becoming insolvent) we highly recommend getting 3rd party insurance that will cover travel supplier financial insolvency.
Also make sure that you're adequately covered by your medical insurance in the destination you're traveling to. Also take into account the medical resources of your destination, in the event you need serious medical care, for coronavirus or otherwise.
5. Consider Charging Travel Expenses Close to When They'll Be Used
While generally our clients make travel plans well in advance, in the current environment, when things are more uncertain, it could make more sense to book closer in time to when the trip will actually occur, both to ensure that airlines, hotels and other suppliers will operate as planned, and because the U.S. Fair Credit Billing Act only covers you if your card issuer has received your billing error dispute within 60 days from the statement date showing the charge. See Tips for Filing Credit Card Chargeback Disputes.
6. Research Others' Experiences with the Travel Supplier During the Coronavirus and/or Use a Trustworthy Travel Advisor
COVID-19 is testing many companies. So far most airlines are failing in their customer care, and many cruise lines as well as a few hotels are as well. Reward with your business those companies that have cared for their customers during this difficult time for all of us, rather than those that have rebuffed client refund requests even when contractually or legally mandated. If you're working with a trustworthy travel advisor, s/he can also advise you on which travel companies have come through for their clients during the coronavirus crisis, and which have been unresponsive.
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