Accountants Ballarat: Common travel and accommodation issues that businesses should be wary of

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Here are some of the common issues that travel and accommodation businesses should be wary of.

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You should include a cancellation policy in your written booking agreements to avoid many potential problems.

A crisis such as a flood or bushfire may lead guests to cancel or postpone their visit and your rights and obligations will depend on the situation. For example, both parties are released from the contract in case the accommodation has been destroyed, access roads have been closed or authorities have advised that the area is not safe. There could also be other situations in which you or your customers are required to vacate an area or are prevented from entering.

Guests may also cancel because of bad weather. Generally, they are not entitled to a refund because of poor or less-than-ideal weather. Businesses cannot be held responsible for external environmental conditions such as no snow at a ski resort, rain during a beach getaway or colder weather on a summer camping expedition.

However, weather conditions may sometimes be integral to the nature of the service and may determine whether a contract can be performed. These situations are ideally addressed through a contractual term or condition but any rights from a potentially frustrated contract should not be limited by the terms or conditions.

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Our goal is to empower you to become a better, more finance-focused and well-rounded entrepreneur. Contact us at info@skyacc.com.au or 1300 328 855

Guests also have other rights in the form of consumer guarantees. Accommodation must be suitable for any purpose specified by the customer. If not, the guest may cancel the booking and obtain a refund, depending on whether the problem is major or cannot be remedied. If you make claims about accommodation that you cannot fulfill, the guest has remedies under the ACL for misleading or deceptive conduct.

You may claim cancellation costs from a customer depending on certain factors. The cancellation fee, booking fee or administrative charge should not be excessive otherwise it may be considered as an unfair contract term. Limit the fees to the reasonable costs associated with making the booking. If the guest has paid a deposit and cancels the booking without a good reason, you will usually be able to keep the deposit based on the contract terms.

A fair deposit is not more than 10 per cent of the total accommodation or service cost, unless the potential inconvenience or loss justifies a higher amount. Higher amounts may be considered as a pre-payment, which is refundable, minus any reasonable or actual costs that you may have incurred before the cancellation.

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As you look for different ways to grow and improve your business, seeking professional advice could prove to be an important and helpful decision.

You can click here to speak to a businessaccounting and bookkeeping firm. We also offer hospitality business consultation and mortgage services. We will give you a call to know more about your needs. We will explain to you how we can improve your business.

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