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The Reality of the Travel Payment Process

June 2021

The Travel Payment Ecosystem

  • Agents are exactly that, an agent for the principal, referred to as an end supplier such as an airline, hotel, cruise line or tour operator.
  • It is the contract between a consumer and the end supplier that a travel agent facilitates. The end supplier dictates the terms and conditions and therefore whether a refund, credit or other is to be returned to the consumer.
  • Consumer funds do not sit with the travel agent. The consumer pays for the booking with the travel agent who then pays the supplier (the airline, hotel, cruise line, tour operator etc) in order for the ticket or booking to be confirmed. It is the end supplier and not the travel agent who holds the funds.
  • The IATA system already provides for all money paid to an IATA agent to be held on trust for the airline (noting the money only sits with the agent for a brief time).
  • When COVID hit, an estimated $10 billion of travel booked by Australians through travel agents with end suppliers (airlines, hotels, cruise lines. tour operators etc) required cancellation or rebooking.
  • The process of securing credits and refunds on a global scale has become more complicated and complex and taking weeks and months with differing supplier terms and conditions. In addition to this, some countries have placed rules on end suppliers not allowing refunds to leave their country.
  • Travel Agents have been supporting Australian consumers through this process FOR FREE and have so far successfully secured an estimated $7 Billion for Australian consumers from domestic and international suppliers.
  • Calls for Travel Agents to have mandatory trust funds are misguided. The government removed this requirement as it understood it was unnecessary. This is because travel agents only hold consumer funds for a very short period of time before it is passed on to the end supplier (airlines, hotels, cruise lines, tour operators etc).