Poor relationship between airlines and OTAs could damage travel sector recovery

Credit: Jonathan Winton Photography.

Poor customer satisfaction rates from consumers may lead to a slower recovery for the travel industry, as it tries to recover from the pandemic. With millions of trips cancelled, many customers have found themselves stuck in the middle of airlines flighting with OTAs (online travel agencies) over refund policies. As a result, many refunds remain unpaid, damaging consumer confidence in the process.

A uniformed approach is needed

There is now an urgent need for a collaborative approach between agencies and airlines. Industry regulations for refunds are not working as effectively as they should, which has become clear since the pandemic. OTAs have been under immense pressure to provide refunds in a timely fashion, with many failing to do so and then blaming airlines for not providing them. Examples include well-documented rows between Love Holidays and Ryanair. BudgetAir (Travix International B.V) and On the beach has also blamed airlines for unpaid refunds leaving customers at loss for what to do next.

How refunds are processed is far too inconsistent and is unclear to consumers. Immediate action from industry leaders is essential for the travel industry’s recovery. Regulatory bodies should assist OTAs and airlines in contingency planning to provide a united front for global scale emergencies. Therefore, consumers will be better protected, and businesses will have a blueprint to provide the best possible service for their customers, which will improve recovery in the long-term.

Ultimately, the task lies with the various industry regulatory bodies to work together and define a clear strategy. A transparent set of guidelines reflecting how these companies work together will provide clarity for consumers, promote a better customer experience, and a more efficient post-booking process. The goal should be to generate clear initiatives where OTAs and airlines work together for the benefit of the industry.

Confusing messages for consumers

Logically, it is perfectly conceivable to expect the passenger to obtain a refund directly from the agency. From the customer’s view, they should not have to go via the airline as they have given their money directly to the agency. However, the guidelines are not entirely clear. From a UK perspective, if a customer has booked a package holiday, then the responsibility lies with the agent or operator to refund the booking within fourteen days. Yet, if they have made a flight-only booking with an agent, the legal obligation is with the airline to refund within seven days, albeit to the agency (providing the airline canceled the flight). Unfortunately, due to OTAs not receiving refunds, passengers are being redirected to the airline, thus complicating the refund process.

Typically, most airlines will refuse to deal with the passenger and redirect them to the agency. The media has reported conflicts between Ryanair and OTAs, regarding quarrels over refunds. Contradictory to the above, Ryanair offers a refund page for passengers who have booked via an OTA. The webpage encourages passengers to book directly in the future to avoid any potential problems, putting the blame firmly on the agent.

The sector needs to pay great attention to customer experience. There is evidence suggesting that trust in a product/service is at the forefront of the customer’s mindset. In a recent GlobalData COVID-19 UK recovery survey, 47% of consumers said they are either influenced ‘often’ or ‘all the time’ by the reliability of a product/service (fieldwork undertook December 2nd – 6th 2020).  The travel sector urgently needs to consider this as it tries to recover from the pandemic.

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