Customers seem to be last in line when a company declares bankruptcy. Picture: Brenton Geach/African News Agency (ANA) Archives
Customers seem to be last in line when a company declares bankruptcy. Picture: Brenton Geach/African News Agency (ANA) Archives

Consumer Watch: Travellers left in limbo dealt yet another blow

By Georgina Crouth Time of article published Aug 31, 2020

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They offered great value-for-money deals, encouraging young travellers to see the world. But after almost 50 years in the sector, Swiss company STA Travel filed for bankruptcy a week ago, yet another victim of the Covid-19 lockdown.

Crushing any hopes of imminent refunds, the National Consumer Commission moved quickly to quell any talk of compensation for consumers, issuing a statement that customers were last in line when a company declared bankruptcy.

It’s a bitter pill for customers, who have complained for months about STA Travel’s refusal to issue refunds.

Instead, it had insisted that customers accept vouchers for future travel, which will now probably prove worthless.

The response on STA’s Facebook page is mixed, ranging from messages of support for the staff and praise for agents’ professionalism, to outrage at the company for its silence on its imminent closure, accepting bookings to the very end and lack of clarity on hoped-for refunds.

The travel provider had advertised packages to “really amazing Thailand” on a #BookNowPayLater basis for a 2021 “vacay” priced from R15290, Mozambique for R5799, and “Basic Bali” from R10990 as recently as August 19 - the day before STA Travel Holding AG, the Swiss parent company, filed for insolvency.

Staff are believed to have been kept in the dark, and by midweek had not received their salaries. STA could not be reached for comment.

In a brief statement on its website, it said: “Due to the recent announcement that STA Travel South Africa has ceased trading, unfortunately our travel experts are unable to assist you at this time. Please be assured that if you had a previous booking with us, or hold a live booking, you will receive further communication in the coming days. We are sorry for the inconvenience and the limited information available to you at this time.”

STA Travel, which originally stood for Student Travel Australia, later rebranded as the Student Travel Association. It specialised in long-haul, adventure and gap-year travel.

The company’s demise sent shockwaves throughout the travel sector, with more casualties inevitable.

Restrictions keep us apart

On Friday, the World Tourism Organisation’s (WTO) secretary-general launched a report on the impact of Covid-19 on the sector, noting that tens of millions of direct tourism jobs were on the line globally, with lost opportunities for vulnerable populations and communities who stand to benefit most from tourism, and the “real risk of losing vital resources for safeguarding natural and cultural heritage across the world”.

It called for travel restrictions to be eased or lifted in a timely and responsible manner and for policy decisions to be co-ordinated across borders.

The organisation’s secretary-general, Zurab Pololikashvili said: “On the back of our successful visits to destinations in Europe, WTO delegations are now seeing first-hand how the Middle East is ready to restart tourism safely and responsibly.

“In Egypt, President Abdel Fattah al-Sisi and his government made clear how strong, targeted support has saved jobs and allowed tourism to weather this unprecedented storm. Now, iconic sites such as the pyramids are ready to welcome back tourists, with the safety of both tourism workers and tourists themselves a priority. Similarly, the government of Saudi Arabia has warmly welcomed WTO and expressed a firm commitment to continue building the kingdom’s tourism sector, first for domestic visitors and then international visitors.”

Pololikashvili said that while lives must be protected, decisive action was needed to protect jobs and safeguard the many benefits tourism delivered.

Earlier last week, the Association of Southern African Travel Agents (Asata) said STA’s demise signalled the importance of announcing a definitive date for the reopening of international travel to ensure the travel sector’s survival.

Asata said that while STA was not a member of the association, the “industry as a whole has made every effort to assist customers to reschedule their travels with little to no compensation since the travel ban was implemented in March, as international outbound travel remains closed”.

“We appreciate (the) government’s efforts to implement a risk-adjusted and phased approach to reopening international travel and tourism. However, in order for the industry to survive this difficult time, a definite date for the reopening of international travel is imperative,” said Asata chief executive Otto de Vries.

A definite date for international travel, he said, would give airlines enough time to plan for the reintroduction of flight schedules to South Africa and allow agents and tour operators to start compiling travel packages for the safe return of corporate and leisure travellers.

Refunds, though, remain a challenge for travel agents, because travel agents, being the intermediaries, have been unable to recover money from the end suppliers.

Customers who paid for travel with their cards may have some recourse, though, as they could apply for a chargeback, which is a reversal of a credit or debit card transaction that is initiated by the bank at the request by the cardholder.

* Georgina Crouth is a consumer watchdog with serious bite. Write to her at [email protected], tweet her @georginacrouth and follow her on Facebook.

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