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Don’t rush into your next ‘pay now/book later’ getaway

19 May 2020

The Queensland Office of Fair Trading (OFT) is advising consumers wanting to make travel plans to be wary about ‘pay now/book later’ holidays in the current climate and to read the terms and conditions carefully.

Fair Trading Executive Director Brian Bauer said that while regional travel restrictions may be easing, international travel restrictions were likely to take some time to return to some semblance of normality.

“Many of us would like to book a holiday that we can look forward to once COVID-19 is over, but there are risks in doing it too soon,” Mr Bauer said.

“Many travel companies specifically operate under the ‘pay now/book later’ business model. Under this model, consumers pay for discounted overseas and interstate holiday packages on the basis that it can be booked and taken between a range of dates.”

Often the dates stated will be within the next 12 months.

“I’ve seen advertising of travel deals which must be taken by as early as November 2020,” Mr Bauer said.

“These are of concern because of the potential inability to take advantage of the deal given travel restrictions.

“The travel industry has been severely impacted by COVID-19, with several travel companies reporting financial difficulties and the appointment of administrators both in Australia and internationally.

“In addition, travellers face the risk that the country they intend to visit may not open its borders by the time they want to travel, may not keep them open, or may unilaterally impose conditions or restrictions on travel in that country.

“Once internal borders reopen, domestic travel holidays may not be as financially risky as international travel, however they will still not be risk free in the short term.

“Dates and conditions for the opening of interstate borders may not align with consumers’ travel plans, making it impossible for consumers to travel to a desired destination to take advantage of their booking. Local quarantine issues may also impact on consumers’ ability to take full advantage of their booking.”

Mr Bauer said the OFT was currently handling hundreds of complaints from consumers whose travel plans had been impacted by COVID-19 and who were struggling to get refunds for their existing bookings.

“Despite the travel bans put in place by the Federal Government, some operators are still marketing holidays for later in 2020 and early next year on a ‘pay now/book later’ basis,” Mr Bauer said.

“If Queensland consumers are thinking about booking a flight, cruise, accommodation or holiday package for travel outside Queensland, and particularly outside Australia in the medium to longer term, they should read the fine print very carefully, paying careful attention to any terms or conditions about cancellations.

“Consumers should also be aware that insurance purchased now for such travel is unlikely to cover any loss that might be incurred if it is due to continuing or re-emergence of COVID-19.

“It is important that consumers understand that if their travel can’t go ahead, they may be unable to obtain a refund.”

For more information about consumers rights in relation to travel visit the OFT website.