Half of all Americans are canceling their summer vacations — what to expect in refunds from cruise lines, hotels and airlines

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Vacation is all Americans ever wanted this summer, but because of the coronavirus pandemic, many people are looking at lost money instead.

Forty-eight percent of Americans have canceled summer travel plans because of the global coronavirus pandemic, according to a survey of 1,200 people from personal-finance website ValuePenguin, a subsidiary of LendingTree TREE, +1.04% . Comparatively, only 16% of people said they have not canceled their summer itineraries, while the remaining respondents had no travel planned for the warmer months.

Meanwhile, some 46% of people said they had lost money on nonrefundable travel expenses due to COVID-19-related cancellations. Those who cancelled plans lost more than $850 on average. Most of those losses stemmed from airfare (59% of consumers), followed by hotel bookings (44%).

But consumers can take steps to ensure that canceled travel plans don’t lead to significant financial losses. “Policies are all over the map right now,” said Sara Rathner, credit card and travel expert at NerdWallet. “Before calling customer service, review the company’s cancelation policy so you know what you’re entitled to.”

Here are some tips for thwarted travelers planning to stay home this summer:

Who is offering cash refunds?

Not all travel providers are offering cash refunds — and even those that are will have limitations on who can receive them.

Airlines, including Delta DAL, -4.57%, United UAL, -5.43% and JetBlue JBLU, -3.99% , have amended their cancelation policies to get rid of change fees in light of the coronavirus outbreak. But travelers will be out of luck when it comes to getting a refund with most carriers if they elect to cancel their trip proactively. While the Department of Transportation requires airlines to provide a refund if the carrier cancels a flight, a travel will typically only get their money back in the form of a credit or voucher if they choose to forgo a trip.

“There’s no benefit to taking the voucher,” said Chris Elliott, a travel consumer advocate. “All the benefit is to the airline.”

As a result, people are better off waiting to cancel their travel plans until the last minute. In that time, the airline might reschedule or cancel the flight, making a passenger eligible for a refund.

Meanwhile, many major hotel chains have introduced flexible cancelation policies that allow consumers to receive refunds. For instance, any new or existing reservations at Hilton HLT, -4.78% hotels through June 30 can be changed or canceled at no charge, even reservations that were previously denoted as “non-cancelable.” The same is true at hotels owned by Hyatt H, -4.52%Marriott MAR, -6.25% and Choice HotelsCHH, -4.33%

In most cases, cancelations must be made at least 24 hours in advance to be eligible for a refund. If a customer wishes to change the dates of their trip, they may be subject to the difference in room rates.

Many cruise lines are also offering refunds to travelers who have either canceled planned trips or who are unable to go on their vacation due to the Centers for Disease Control and Prevention’s no-sail order, according to travel website Cruise Critic. Travelers could encounter difficulty getting refunds though if the trip was paid for using points or gift cards.

But people who can’t travel this summer, yet still want to go on a cruise vacation in the future might find it advantageous to get a credit instead. Many cruise lines, including Princess CCL, -5.27% and Norwegian NCLH, -2.01% , are offering future credits worth more the original cruise fare — in same cases, the credit can be worth double the original amount paid.

“Which option to choose isn’t as easy of a decision as you might think,” Cruise Critic senior editor Erica Silverstein wrote. “Should you take the certainty of cash or be tempted by “free money” to use toward a longer cruise or nicer cabin than you initially booked?”

How to improve your chances of getting money back

Don’t call right away. The phone lines at airlines, hotels and cruise lines are jammed with people doing the same thing: Canceling their trips. “Customer service hold times are so long right now that I typically start with an email, unless I must have an answer today,” Rathner said.

If you do call, make sure to have all your trip information handy to ensure the call is fast and productive — and be prepared to wait on hold for an extended period of time.

Book trips with the right credit card. Many credit cards offer travel protection as one of their perks — and that protection can come in handy in the current situation. “This can help you get your money back if you must cancel your trip because you or a family member becomes ill before you leave,” Rathner said. “It can also help cover the cost of cutting your trip short if you get sick while traveling.”

Not all travel insurance policies will help. If you didn’t purchase your travel insurance before the coronavirus first cropped up, it likely won’t cover any losses from canceling a trip. The only exception are “cancel for any reason” policies — but these are usually more expensive and can have their own exclusions.

If you get a voucher, ask questions. Most travel vouchers that airlines and other companies are offering have a use-by date. Travelers should confirm what happens if the voucher’s expiration date comes around before the coronavirus has dissipated, Rathner said. And make sure the voucher can be used for any trip or destination, not just the original itinerary.

If all else fails, go to social media. While publicly complaining on Facebook FB, +5.23% or TWTR, -7.10% shouldn’t necessarily be a traveler’s first way of seeking a refund, it can be useful, U.S. PIRG wrote. If “they don’t allow you to change, cancel or receive a voucher for your travel, you can ask the airline to expand their coverage via social media,” the consumer advocacy organization said. “If enough people take this action by posting and tagging the airline or hotel chain, it may cause them to reconsider their policy during this time.”

Originally Published on MarketWatch

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