Change Fee For Covid Cancellation?

Hi all! I hope everyone is safe and healthy.

Looking for others' experience/advice. I had a charter scheduled for July and the charter company recently emailed me to explain that they had to cancel as the BVI Government is not likely to open the boarder to tourists until at least September. They went on to point out that I did not purchase "Cancellation Insurance" so they felt that they had the right to keep my deposit, but they would try to work with me. They would agree to hold my deposit for up to 24 months for credit towards a future booking in return for a significant Change Fee. After I pushed back they offered to reduce the change fee to something lower but they insisted charging a Change Fee.

I really feel taken advantage of here. The Charter Contract reads in part "If Charterer is forced to cancel the deposit is forfeited". They cancelled... Not me! I feel that I am entitled to a full refund of my deposit. However I am willing to be reasonable and let them keep the credit as I will use it next year. But I am really hung up on being charged a change fee. I don't think this is right.

What are others' experiences for charters this summer? Am I being unreasonable?

I don’t think it’s fair to say that the charter company cancelled. It’s also not fair to say that you cancelled. Either way, it’s a tough situation and you likely could have purchased cancel for any reason insurance.

I suspect that the charter company recommended cancellation insurance.

So what is the right answer? I have no comment.

We were booked for a Moorings charter scheduled to start 07/03. I knew for quite some time that it was unlikely to happen but went ahead and paid the balance due because we definitely wanted to go at some point. According to The Moorings notes on their website, it seemed like until you paid in full, you would be in a fight to do any rescheduling.

Fast forward to last week. By that time Moorings was canceling all charters through 07/22, so I contacted them (via online chat and email) about rescheduling for 07/02/21. They responded promptly and got us rescheduled without any hassle. Today I see they bumped their cancel all date to 06/30. We have friends on another boat scheduled to leave 07/03 but they keep holding out hope it will happen, and waiting until it is canceled to do their rebook. They too had paid their final payment 30 days ago even though it was likely the charter wouldn't happen.

Next up for us is to get on the phone with Delta to get flights rescheduled. I looked at doing it online but the 07/2021 dates aren't showing yet and I guess won't for another 90 days or so. Hopefully they can do more on the phone because I'd sure like to do it as a reschedule and not a cancel and hope the credit we get will cover the cost of the flights next year.

Good luck

Unfortunately, if you are not paid in full by your due date, you can be in breach of contract if you did not purchase insurance.

I knew it was very unlikely our May 24 charter was going to happen back on April 10 when our final payment was due but we went ahead and paid in full. I waited until BVI Yacht Charters contacted us to cancel and they happily rescheduled us for November at no change fee. I am fairly certain if we had not been paid in full, that would not have happened.

These are indeed frustrating times but it is definitely a risk we take when booking without insurance - I did not have it either - I rarely buy it as there are so many exceptions to what it actually WILL cover and typically when I book a charter, there is very little chance we will have to cancel. This is the first time in 15 years.

Our charter with CYOA was supposed to start May 2nd. We made our final payment in mid-March while still holding out hope we would be able to go. By the first week in April we faced reality and cancelled and worked with CYOA to reschedule to November. I'm very happy with how CYOA handled the situation

There have been other threads on this issue that might offer you insight. Each charter company is handling things differently. Some postpone the charter, with the final payment due as in the original contract; e.g., 60 days before charter.

They all seem starved for cash, so giving the best terms to fully-paid customers makes sense, unless they're not around by the new date! Would your credit card cover you in that case?

As to who cancelled, if the charter base is now closed, then maybe you could challenge your credit card deposit now. Won't make you popular, but it's your money.

Most charter companies are requiring payment but allowing rebooking without penalty and using the current rates not the 2021 rates.

lol. Maybe, maybe not...

You didn't indicate how large the change fee is. While I agree there should not be a change fee, if it's a small amount I would accept it and move on with life. To be fair, they probably aren't obligated to offer anything based on the contract so you might consider it a blessing.

At Coconut Breeze Villas, we are grateful for everyone who is rebooking instead of canceling, not charging any fees, and honoring the 2019/20 season rates next year. Also, we don't require full payment in advance so our guests are only "loaning" us half their rental cost.

There are many posts on this. I have taken the position that I want to consider who is my counter party in these transactions. I left money as a credit for some of the island based companies (air charter etc.) for our trip that just would have ended today. If they fail then my money ends up in the BVIs and I can live up to that. I did a credit card dispute for the boat trip as I dont want to be a counter party to a private equity company where "honor" isn't a word used frequently in relationship to PE companies as witnessed by how they treated the charter employees at the start. IMHO the charter companies are desperately playing for the short term and funding guaranteed owner payments using "credits" from charters cancelled. How and when does this game end? The charters are cancelled at their end, not mine. I contracted for a specific week and like IRMA they couldn't deliver on their end..unlike Irma however, they will only give credits instead of refunds. I assume this is due to the lack of business interruption insurance for the pandemic as opposed to the hurricane....

I dont think it is unrealistic to expect some charter and other travel related companies wont survive this. See Thomas Cook by way of example which went down even before this started. For me personally I am not taking that risk here with the charter company.

By way of full disclosure I have no business interests in the BVI....for our rental property in NC if people want refunds they can have them and if they do a credit card dispute which is totally within their rights I am fine with that as well if I cant deliver on my promise for a specific week for our house

Booked with BVI Yacht Charters for a week starting June 13th. When it came time to pay the remainder of the charter fee they recommended I not pay it. Instead, they gave me a credit and I rebooked for October. October rates are cheaper than June rates so even with the additional change fee I came out ahead. It's all good.

Mark:

As others have pointed out, this is a recently debated topic. Its certainly a tricky topic as well and is unfortunate for all involved - in particular the charter guests like you.

I would agree that you didn't cancel in the traditional sense and clearly the charter firm cancelled you - albeit for reasons outside their control. So, it would appear they breached the contract and would owe you all amounts paid. However, I don't know what your contract says and that may cover this issue - eg they may exclude any fault due to acts of god (pandemic), etc. That may be relevant even if its not right (in my opinion). I also don't know how you made payment (credit card, check, wire, etc.) so don't know how difficult it may be to get your funds back - certainly, there's some possible level of protection if via credit card and dispute resolution. But regardless, good luck.

I have a similar situation though I'm in much better shape than you. I was able to fully cancel out and get all funds refunded to me, less a relatively small "cancellation" fee even though the charter company couldn't fulfill the boat (similar situation to yours). (My final payment wasn't due to be paid until after the pandemic hit so I was able to avoid having 100% of the cost out of pocket.) Still, I will tell you that I'm disputing that fee with Visa on similar grounds to your situation. I am expecting that dispute to be declined but it would be a small price for me to pay vs what would have been a $12k charge. I was requested but unwilling to roll over and reschedule my trip as it would have been in 2021 for me and that's unrealistic for me to provide that deposit that far in advance.

Again, good luck.

IMHO the charter companies are desperately playing for the short term and funding guaranteed owner payments using "credits" from charters cancelled. How and when does this game end?


Bailau you just described a pyramid scheme

Or Ponzi?

Hey Mark. I own a charter company in the USVI and Caribbean in general. It is actually pretty complicated. If in their contract, under cancellations, they specifically mention "pandemics", then you are probably in trouble. If their contract only mentions "force majoure", then they are probably in trouble. Either way, most lawyers i've talked to on both sides of the table recommend sorting it out. You were very kind to "them" by not mentioning their name here, but if they keep your deposit, with no option to rebook without a fee, then i would definitely fight them.

I am not an attorney but I believe a well drafted contract from the charter side will include both a listing of possible events with the language "including but not limited to" AND force majeure. The charter contract I signed (and my guests in NC sign) includes both (including the specific word "pandemic") and IMHO is well written. It also would have covered IRMA, an event for which refunds were provided immediately by contrast.

I do think when the dust settles on all the litigation from Covid in a decade or 2 these FM provisions will be a thing of the past especially if people lose money due to further breach of contract by company insolvency. I think there will law changes under consumer protection especially in the US where my specific charter contract is adjudicated.

From a reputational standpoint these charter companies need to be careful as well on how they treat this situation. I tried to sort it out and couldn't get anywhere with my charter company. I am still highly loyal to them and will recommend them to anyone once the dust settles.

Although a bad situation for all parties nothing compares to what all our friends in the BVI both on this board and not are going through....especially as they were so close to recovering from Irma.

You are 100% correct in all regards. Great post, and well done by you

"You are 100% correct in all regards"

I can assure you that is never the case with me my friend as my wife will readily tell you....

Moorings has "graciously" agreed to waive the change fee for us to reschedule for next year, but at the 2021 rates. Those rates are being quoted at almost DOUBLE 2020 rates! Of course, we have the option to pay the balance of the contract for this year but really hate to put that much more money out there for a next year's charter.

Advice?????

We have spent considerable time going over this at CYOA. There are no easy answers. This is how we are handling it.

CYOA Covid Update and Reopening plan

The Moorings loves their change fees. They keep all of it. They are usually agreeable to rescheduling if they get the change fee. The customer service supervisors have a lot of discretion in normal times. Maybe not so much now. I book all travel with Amex. They are good at protecting their cardholders. If you feel you are getting screwed dispute it with the CC company.

The OP’s charter does not appear to be with the moorings and I don’t believe the Moorings is charging change fees on canceled charters.

Thanks to all who replied. I intentionally did not name the charter company as they have my cash and I don't want to make them mad! It is NOT the Moorings. If my charter was with the Moorings i likely would not have this problem because I would have paid with a Credit Card. Moorings also had a more detailed contract from what I remember. The company I am dealing with makes its customers wire them the money. I am at their disposal unfortunately. The fee they are charging me is not large but its the principal here. I really feel violated. In any case these are "first-world problems" and this too shall pass. I plan to leave it alone for now and when I finally get down there for my charter, whenever that is, I will ask them to add some value to make it up. Hopefully by then the fear will have subsided and they will make the right customer relation choice. If they don't I will still enjoy my charter and then likely not use them again which is a shame because I have used them twice before and they were AWESOME (although I never had a problem with them before).

My big fear is that they may go out of business before I am able to use the credit!

Stay healthy and safe everyone!!!

Mark

From a technical point of view (and very debatable?), the boat you say they could not fulfill? or you could not get to the boat? Was boat destroyed (ie Irma)?

Even though our trip was not yet officially cancelled by The Moorings, we were fully paid so they switched us to next year without any change fee. There was a slight increase in the boat coast ($5 I think) and the rooms ($5 a night) but the agent got all of that waived without any prompting from me. Obviously they'll have use of my money for a year and even Moorings can go broke, so this takes a bit of faith on my part. After 13 trips with them, including one 10 months after Irma, I've been pleased with their response and wish them the best for the next year.

I will point out something that should be obvious. If a company requires you to wire money and will not accept credit cards they are probably in deep financial trouble. More than likely the card companies have recognized this and are maintaining deep holdback requirements. They may even have cancelled their card agreements. In the travel industry credit cards are the norm not the exception and don’t buy into statements like they don’t want to pay the costs.
From a standpoint of being a charterboat owner you should also be very cautious if a company can’t show exactly how they maintain your money accrued prior to contractual disbursements. If that money is sent away and the company simply considers it theirs to use as they see fit and they don’t maintain owners money in a separate account I would run not walk away from that company. It’s not their money and they can’t legally spend it. Some companies do however.

That is a good point, George. I cant see ever not paying with AMEX (or doing business with someone who wont take it) from now on and further will see where the contract is adjudicated with preference to the US legal system especially when I recommend BVI charters/trips/spots to clients and friends.

At least in my charter case I can drive to any arbitration in Delaware if it ever got to that.

I certainly hope this all works out and all companies stay in business especially for those people on BVI. As someone else said my problems are 1st world and grateful for that.

We were schedule for May 2nd - DYC out o scrub. Final payment was due March 16th. Canada recommended no non-essential travel, airspaces shutdowns, travel restrictions, closures, etc. In our mind there was no way we were going to be able to go in May. Then the US/Canada border shut down, Delta cancelled the flights (got a refund for that at least!)
Technically I was in breach of our contract but given the situation there is no way that we (group f 4 guys) were going to trust that a charter company will be able to survive something this massive. At the end of the day we may lose our deposit but DYC is allowing us to rebook, but requires a payment in full upon rebooking which is not going to happen until we figure what is the likelihood that we can go next May. If it surges back in the fall/winter we may be going through this all over again!

at the moment just waiting and dreaming.....

This indeed is a slippery slope. My final thought is that the charter companies should fully honor your contracted deal for a period of time without additional change fees. I’d say that 12-24 months would be reasonable. Cruise ship companies are totally refunding. Airlines are giving 12-20 months to use booked flights without change fees. If one argues about cancellation insurance and feels sorry for the charter companies well just remember that the charter company should certainly carry business interruption insurance. This is a big interruption.

While this is a big interruption, most policies have virus and pandemic exclusions, unfortunately BI is not covered for this current situation........and while this point is surely going to be litigated in the court systems for quite some time, if the insured's prevail in the end, they may have not been able to survive while waiting it out. Sad but factual.

I think a lot of bankruptcy trustees will be fighting that battle...Hertz filed for bankruptcy with $1 billion in cash

If you are going to file Chapter 11 with the intent to reorganize and continue to operate you need a substantial amount of cash on hand. Once you file you have to start paying suppliers with cash rather than invoiced credit.

Good point George...