Why some airline refunds take so long

The cancellation of any vacation is always a difficult one. Delaying a week of poolside paradise due to unforeseen events (like a global pandemic) is never fun. To add to the challenge, it can sometimes take weeks or even months for an airline refund to show up in your bank account. If you booked your trip with an online travel agency (OTA) like Travelocity, and are still waiting on yours, here is everything you ever wanted to know about airline refunds and credits, and why yours might be taking longer than expected.

Exactly how do OTAs like tourguidetrip work?

To put it simply, travel suppliers (like hotels, airlines, and car rental companies) distribute and market their products on third-party sites like Travelocity in order to reach millions of travelers around the world. They load their available inventory into the OTA’s system, then set the pricing, and publish. By making their platforms accessible for a variety of travel suppliers, OTAs like Travelocity can offer travelers a convenient way to book their entire trip, delivering the largest variety of travel offerings across flights, accommodations, rental cars, and activities.

When I purchase an airline ticket through an OTA like Travelocity, where does my money go?

Most OTAs allow you to either book a single flight, hotel, or car; or book a package that’s a combo of those. This is done primarily through either a merchant or agency model.

Under a merchant model, the online travel agency facilitates the booking of hotel rooms, alternative accommodations (like vacation rentals), airline seats, car rentals, and destination services from travel suppliers and acts as the merchant of record for such bookings. This means the OTA is the one charging the customer directly. Most merchant model transactions for OTAs like Travelocity are related to lodging bookings.

Under the agency model, an OTA facilitates travel bookings and acts as the agent in the transaction, passing reservations booked by the traveler directly to the relevant travel provider. The OTA in turn receives commissions or ticketing fees from the travel supplier and/or traveler. This means the travel provider is the one charging the customer so that when you look at your bank statement, the actual supplier (like the airline, for example) will show up and not Travelocity.

If I am owed a voucher, refund, or credit, will it come from the OTA or the travel supplier?

Regardless of the business model, terms and conditions and rules and restrictions for the booking are set by the supplier and not the OTA. For example, whether or not a booking is refundable, or whether a change fee is charged are all determined by the supplier. However, OTAs typically employ large customer support teams that advocate for the customer in the event there is a dispute or issue between the customer and the supplier, and they’ll work directly with the supplier to find a resolution on behalf of the traveler.

During the first few months of the global pandemic, for example, OTAs navigated more than 3,000 separate airline cancellation policies; many such policies called for travelers to be issued credits. Travelocity, for example, built a “one-click” cancellation feature that gave travelers the ability to cancel directly through SMS or via the app, thereby alleviating the stress and long hold times involved with mass cancellations.