The Consumer Protection Act aims to protect and balance the rights of both consumers and accommodation providers. Picture: Pixabay
As the festive season looms and holiday plans are discussed, finalised, or even changed, you will be happy to hear that you are fully entitled to cancel any bookings you have made – and be refunded.
Just how much you will be refunded, however, is not as clear cut, and depends on a number of factors outlined by the Consumer Protection Act (CPA).
Before we unpack these and possible areas of contention, what you need to know upfront is that, if you cancel your booking within five business days of the transaction or agreement being concluded, you should get a full refund –no questions asked, no reason necessary.
These five days are considered to be a ‘cooling off period’ in which you can reconsider your plans without facing financial consequences.
To exercise your right to cancel, law firm Pagel Schulenburg states that you must provide written notice to the accommodation provider, expressing your intention to cancel the booking. This notice must be sent within the five-day time frame.
“Upon cancellation, the accommodation provider is obligated to refund any payments made by the consumer within 15 business days. This includes any deposits or partial payments that may have been collected.”
If you need to cancel your booking outside of this cooling-off period, though, the rules change. This is because the CPA aims to protect and balance the rights of both consumers and accommodation providers. Ultimately, providers cannot get away with blanket ‘no refund’ cancellation policies and consumers can’t simply change their minds to the detriment of the accommodation providers.
Therefore, the middle ground is that, while you can still cancel your booking, you will be liable to pay a cancellation fee – and this is where things can get a bit tricky as the Act does not give specific figures for how much this fee should be. It simply states that the fee must be “reasonable”. Furthermore, the onus is on the accommodation provider to validate its chosen cancellation penalty.
Generally, individual establishments use sliding scale cancellation policies to establish what they consider to be reasonable; the penalty will increase the closer the cancellation date gets to the booking date. This is because it will be more difficult for a provider to get another booking in a short space of time. What needs to also be taken into account when determining reasonability, however, is the time of the year the booking is made as, if it is during the festive season, it could be argued that it will be easy to get a replacement booking. Similarly, if it is not a busy holiday period then it could be considered more difficult to recuperate a financial loss arising as a result of your cancellation.
That said, there are two caveats you should be aware of:
1. If the accommodation establishment is able to secure a replacement booking, then it cannot impose a cancellation penalty and should refund you in full – minus, perhaps, an administrative charge for time and resources spent on securing the new booking. This is because it would not be right for the accommodation establishment to be paid twice for one booking.
2. If a booking needs to be cancelled due to the death or hospitalisation of the person for whose benefit the reservation was made, a financial penalty cannot be imposed. While the Act does not stipulate whether proof of this is required, it may be reasonable to offer such if requested.
By understanding the provisions of the CPA pertaining to cancellation, Pagel Schulenburg says both consumers and accommodation providers can navigate cancellations in a manner that is legally sound and fair.
“It is crucial for consumers to be aware of their rights, including the timing and notice requirements, to make informed decisions and protect their interests when cancelling holiday accommodation bookings. Accommodation providers, in turn, must ensure compliance with the law to maintain transparency and uphold consumer rights in the realm of holiday reservations.”
IOL Business