Chargebacks Expected to Follow in the Wake of Canceled Travel Plans for Leisure Travelers

Chargebacks Expected to Follow in the Wake of Canceled Travel Plans for Leisure Travelers

September 9, 2021

Following up a report on business travel last week, a new study found that leisure travelers are also canceling trips due to rising case counts of Covid-19. Nearly 70 percent of leisure travelers expect to take fewer trips with 55 percent likely to postpone travel plans and 42 percent likely to cancel without rescheduling, according to the American Hotel & Lodging Association (AHLA).

The travel industry was especially beset by chargebacks last year when lockdowns and travel bans resulted in massive cancellations to booked travel. The most recent surge of Covid has seen some travel restrictions internationally, but far fewer than in the spring of 2020. While official bans are not as significant as last year, travelers are staying home by their own choice, the AHLA said.

And, while many travel businesses updated policies to account for plans canceled due to Covid, a surge of cancelations with no plans to rebook will result in more chargebacks than usual, according to experts.

Airlines, hotels, cruise lines and other travel-related businesses were among the segments hardest hit by chargebacks in 2020 when most travel plans were abruptly canceled due to global restrictions. Visa made adjustments to its chargeback rules that will be going into effect in October. Some of these changes—notably a wait time of 30 days before issuers can initiate a chargeback against travel and tourism companies—were specifically designed for travel-related merchants in response to the challenges they faced in the pandemic’s early days.

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