The sorry story of a couple charged $7,479 in cancellation fees

The letter from an elderly lady was heartrending. Four days after she had booked a $9,462 cruise, her husband was taken to hospital with an infection.

With nearly three months left to the travel date, she felt sure she would get her money back. But she was wrong.

Emirates-owned Imagine Cruising said they would be keeping $7,479 in cancellation fees.

Publication of the story has sparked an online debate among the cruise community about what’s right and wrong with cancellation policies. It has also exposed confusion and a plethora of differing policies which can cost the unwary many thousands of dollars.

But there is some good news.

While cancelling a holiday is the last thing on your mind when you are booking, if you’re smart you can avoid the expensive consequences of at least some cancellation charges.

It’s obvious that the earlier you cancel your cruise, the smaller the penalty should be, as this provides cruise lines with the time to resell the cabin you were holding.

And the second most important lesson: get good insurance.

Travel insurance saves the day

Cruise Passenger’s own cruise group discussed the couple’s case this week, and brought up some salutary stories.

“Cancelled a huge Cruise back in 2016. Husband was diagnosed with Kidney Cancer 10 days before departure. Holiday involved flights, hotels, transfers and 30 day cruise around The Baltics and across the Atlantic to New York via Boston. Thank goodness for Insurance, every cent was refunded by Insurance Company except for the $150 each excess. So bloody grateful for it. We are heading off next week to do it now,” writes Carol Williams.

And Vee Lepp wrote: “I had to cancel a Mexico cruise a few weeks ago with Carnival. Penalty was $500 for two of us. Everything else, tours etc was refunded immediately. When I put in claim with 1Cover it was approved in 24hrs and claim back in my account in one week very impressed.”

These are the lucky ones. Others have found themselves in double jeopardy, liable for both the cruise lines cancellation costs AND their travel agents.

The agents incur costs from administering bookings and then costs from cancellations. Some have flat fees that are as high as $500.

So whether you booked with a travel agent, or directly with the cruise line may also affect the total cost of cancellation.

According to the InsureandGo website, travel insurance “generally covers you for the cost of cancelled flights, hotels, visas, tours/excursions, paid-for activities or sports, and prepaid meals. This is all assuming that the airline, cruise, tour company etc. hasn’t given you a refund already.

“If you booked your trip through a travel agency and they charged you fees, you might be able to claim back some of these costs too, depending on your policy.”

Travel agent cancellation fees

The fees vary depending on which travel agent you use, so remember to check with your travel agent their cancellation policy as well.

Travel agency Cruise 1^st policy states: “Cancellation fees vary for each booking and are subject to supplier penalties. Cruise1st will charge a $300 per person cancellation fee, however each supplier may charge their own fee.
“If you choose to rebook with Cruise1st we will reduce our $300.00 per person cancellation fee to a $50.00 per person rebooking fee.”

Meanwhile at Bicton Travel, they state: “We reserve the right to charge a minimum amendment fee of AUD $55 per person for each change to a confirmed booking. This is in addition to any fees charged by the supplier.”

“We also reserve the right to charge cancellation fees of a minimum of AUD $100 per person to cover administration expenses. The cancellation fee can be as high as the entire purchase price (100%) of the booking.”

“The cancellation fee charged by Bicton Travel can increase in relation to the manpower and time spent on actually processing the cancellation. The calculation of the particular cancellation fee charged may be provided upon request.”

Cruise line cancellation charges

Cruise Passenger surveyed the cancellation policies of the cruise lines and found that cancellation charges often range from none, the deposit, 25 and up to 100 per cent of the total fare.

But they have different timeframes for when the cancellation charge is increased. Some lines also have different timeframes for short and long sailings.

For example, Royal Caribbean Cruises states that the cancellation charge is 100 per cent of the cruise fare if guests cancelled their booking 30 days or less from departure.

Princess Cruises, on the other hand, differentiates the charges for sailings five night or less and all other longer sailing. The line only charges 100 per cent of the cruise fare when you cancel your booking 14 days or less for a short sailing. For longer sailings however, they require a notice of 42 days or more in order to avoid losing 100 per cent of the cruise fare.

Consumer protection

This story does have a happy ending – though only because a journalist stepped in.

The couple about to lose 79% of their cruise fares are from the UK, and they did get their money back – but only after a consumer journalist pointed out she was reporting the matter to Britain’s equivalent of the Australian Competition & Consumer Commission (ACCC).

Britain’s consumer law states that companies can only retain money they need to offset losses caused by cancellations. If there is enough time to sell your cabin on, you shouldn’t be liable for the cruise fare.

That’s better than the consumer laws in Australia. The ACCC advises that the Australian Consumer Law only kick in where a business cancels a service.

“Where a business cancels a service, under the consumer guarantees regime, the business will be required to provide a refund or replacement fare, without charging a fee,” says a spokesman from ACCC.

“In general, consumers will not be entitled to a refund because they simply changed their mind, found it cheaper somewhere else, or decided they did not like the purchase or had no use for it.”

“The Australian Consumer Law does not prohibit a business charging a fee for cancellation in these circumstances, even where they are able to resell the fare.”