Travel industry gets flexible to calm clients' money fears

Travel industry gets flexible to calm money fears during financial crisis.

— -- Mary and Mike Nadeau of Howell, Mich., considered canceling their October trip to Myrtle Beach, S.C., because of the meltdown on Wall Street. But the couple, 64 and 65, respectively, decided to go anyway: They'd already spent $500 on non-refundable airline tickets.

So Mary Nadeau put on her negotiating hat.

First, she succeeded in reducing the contract to three nights from seven at the Island Vista, a new high-end, oceanfront condo. Then, she says, the property granted them a 24% rate cut "not because I complained, but because I asked." Ultimately, they paid $475 for the three nights.

"They were more than willing to say 'OK, no problem,' " she says.

As the stock market decimates Americans' retirement accounts, travel agents are noticing more willingness from travel companies to help worried customers. The Nadeaus' experience is one example of how people can curb their losses, but there are others.

High-end Crystal Cruises, for instance, this week said it's easing cancellation and refund policies for most cruises.

Under the new rules for fall 2009 cruises, customers will be able to cancel without penalty up to 45 days from sailing date instead of 75 days. They'll also be able to reserve a cabin with a 5% deposit instead of 10%. They'll have seven days to pay instead of three.

Agent Rita Gilmore of Ethan Allen American Express Travel in San Mateo, Calif., calls the policy adjustments a "smart move" that can calm clients' nerves about committing to a cruise that can cost up to $8,000 a couple.

"People in the Crystal Cruise market will probably have the money to go, but they're still being very cautious because they lost so much on their investments," Gilmore says.

Kim Gray, an agent with Travel Leaders in North Olmstead, Ohio, near Cleveland, says one Hawaii tour operator is giving customers extra time to pay in full: Her customers have until Nov. 1 to make final payments on a $5,000 per-person package trip leaving Dec. 26.

"They're giving me 30 more days to hang on to that reservation," Gray says. "They're giving people a little break."

In its poll this month of travel agents, the large travel agency chain Travel Leaders (formerly Carlson Wagonlit Travel Associates) found that 21% of the 200 responding agents reported having at least some cancellations, says Steve Loucks, Travel Leaders' spokesman.

Though Adventure Collection, a boutique tour operator that caters to wealthy clients, hasn't seen many cancellations, CEO Jim Sano says they'll consider requests on a case-by-case basis unless it's too close to departure and they've already spent money.

"Our customer-service model is to build long-term relationships, so we try to be as flexible as possible vs. adhering to rigid cancellation policies," Sano says.

One well-heeled client had planned to take a dozen relatives to the Galapagos Islands at a cost of about $100,000 excluding airfare. "We gave him the flexibility to extend his trip to 2010, and he was happy with that," Sano says.

Travel companies across the price spectrum have to do something to entice travelers to book or keep their plans, says Terry McCabe, national leisure director of Manhattan-based Altour.

She says she just had a financial industry executive scrap his December trip to the Caribbean.

"They're saying, 'Maybe this isn't the time to spend $15,000 on five days in St. Barts.' "