The Prepaid Peak-Season Block That Cannot Be Refunded
A Jaipur travel agency has confirmed a 6-night Rajasthan package for a family of six travelling 20–26 December: Jaipur (2 nights), Pushkar (1), Udaipur (3). To hold the peak-season price, the agency's consultant booked the Jaipur hotel on an advance-purchase rate - three twin rooms × 2 nights at ₹4,200 per room per night, fully prepaid ₹25,200, non-refundable and non-amendable - and issued six low-fare-class air tickets at ₹6,900 each, carrying a ₹3,500 cancellation fee per ticket plus non-refundable taxes. The agency's printed terms say: 'Cancellation 30 days or more before departure: 10% retention.' Twelve days before travel the client's father is hospitalised and the family asks either to postpone by ten days or to cancel and get back everything except taxes. The owner must decide what to recover, what to offer, and what to write to a client who has booked twice before.
1. Work out, with figures, which components of the package are still recoverable and which are lost, then state the position the agency should take in its written reply.
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Component-by-component:
- Hotel, ₹25,200. Already paid on a non-refundable, non-amendable rate. It is at risk, not recoverable. A date change now depends entirely on the hotel's goodwill; the agency may request it in writing within 24 hours but must not promise it.
- Air, 6 × ₹6,900 = ₹41,400. Cancellation fee 6 × ₹3,500 = ₹21,000, plus taxes that are never refunded. Roughly ₹20,400 minus taxes comes back - most of the airfare is lost.
- Agency service element. The 10% retention clause is written for cancellations 30 days or more out. At 12 days the clause does not apply, so the agency cannot retroactively charge 10%; charging it would be indefensible if the client complained.
Logic of the reply: separate supplier losses from the agency's own money, attach the prepaid hotel invoice and the airline's fare rule, and give the client a decision they can actually make: (a) the agency requests a hotel date change in writing and holds the request for 48 hours, (b) air refund is filed immediately with a written figure of what will and will not return, (c) the agency waives its own service fee. Showing the arithmetic protects the relationship better than one unexplained retention amount.
2. Was the consultant's booking decision sound? Set out a booking and cancellation policy the agency should apply to peak-season packages.
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Assessment. The consultant optimised for price on a booking made months ahead, for six people, over Christmas - the period with the highest probability of date changes and the lowest chance of resale. A non-refundable, non-amendable room block converts a small saving (typically 20–30% off the flexible rate) into a total loss of ₹25,200, and the low-fare air class adds a second sunk cost. The risk was concentrated in one decision with no client sign-off recorded.
Policy to adopt:
- For every package quote two options - flexible rate and advance-purchase rate - with cancellation terms printed beside the price, not buried in the brochure.
- Use non-refundable inventory only for departures under 30 days, small parties, or where the client signs a written acknowledgement of the risk.
- Take a non-refundable deposit equal to the un-recoverable supplier cost; if the client will not pay it, use flexible inventory.
- Offer travel insurance at the quotation stage and record refusal in writing.
- Set a clear internal cancellation ladder (e.g. 30+ days = service fee only; 15–29 days = fee plus supplier charges; under 15 days = full supplier loss plus fee) so no consultant improvises at the counter.
- Log every date-change request with time and channel, so a later dispute can be answered with evidence.
3. The client says they will post about the agency online. Recommend how the owner should handle this both commercially and in writing.
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Commercial judgement first. The recoverable cash is small; the reputational cost of a public accusation of hidden charges is large, in a city where most business comes from referral. The right move is to absorb the agency's own margin and to fight for nothing that belongs to a supplier.
Actions:
- Reply the same day, in writing, before the client posts: acknowledge the illness, state the two supplier amounts, and confirm what the agency is doing (hotel date-change request lodged today, air refund filed, service fee waived).
- Offer a credit: if the family rebooks within 12 months, the agency applies its full service fee against the new booking. This costs nothing until it is used and converts a loss into a future sale.
- Put one person in charge of the file so the client is not passed around, and give a date by which they will hear back.
In writing: never argue publicly. If a post appears, respond once, factually, without disclosing the client's medical details, and move the conversation to a private channel. Keep the letters, the hotel's reply and the airline's refund advice on file - the paper trail is what protects the agency if the complaint escalates beyond a review.