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April 2020    Download the Entire Issue (PDF) Available to the Public Vol. 46, No. 4   RSS Feed for Undercurrent Issues
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Diving, Travel, Coronavirus, Chaos

What’s happening to the traveling diver and our destinations?

from the April, 2020 issue of Undercurrent   Subscribe Now

Thousands upon thousands of divers have had their travel plans quashed, after making down payments or full payments of several thousand dollars. Most never left home, some got turned around at an airport, and others had their trip cut short and had to struggle to get home. And, as a reader of Undercurrent, there's a fair to middlin' chance you're one of them. And hopefully, that means you're safe at home, where we should all be.

Flying to some remote destinations may be nearly impossible for many months, even longer.

So far as we can tell, most dive operators are letting people reschedule at no charge while a few are tacking on a fee to cover some of their costs. A few dive operators are refunding down payments, fewer are refunding the full amount. The reason for not providing refunds is simple: given their financial obligations, many operators have already spent some of the money they collected, and they have obligations for much of the rest. And the dive traveler has little, if any, recourse.

Glen Cowan, a Freemantle, Australia, subscriber, who had several trips scheduled, had varying responses. "We had booked the Raja Ampat Aggressor in March and tried to cancel late January as I saw the writing on the wall with what was happening in China and did not believe Indonesia had no cases as we know Indonesia well . . . Although I had written multiple articles on almost every boat over the years, they told me to "claim it on your travel insurance," even when I explained my mum had gone palliative and I could not afford to travel if it went pear-shaped and not be able to get back to her if she went worse; still no sympathy, they just sent me an item from the Jakarta Post showing Jokowi pushing for more tourists during the scare and that Indonesia says no cases. On the other hand, Galapagos Sky allowed us to postpone at no penalty or get a refund with the small penalty. Five Stars for Galapagos Sky." Overall, he spent US$17,000 for planned trips for which he has so far received no consideration.

What About Rescheduling?

For many people, rescheduling a dive trip to the same destination may be difficult, if not impossible. One may not be able to get the time off or other trips may have been planned, or, paying an airfare once again may add too much additional cost. And trips involving more than a couple of people may never be able to be rescheduled at a time to satisfy all members.

Flying to some remote destinations may be nearly impossible for many months, even longer, as some airlines try to regroup or go out of business. And, of course, the dive center or liveaboard that will welcome you back a year from now may simply not be there, a victim of all that lost business. And the biggest concern? The virus itself. Just how long will the threat last? Will it bounce back in the fall? How will the population and infrastructure of third world countries be affected? When will you feel comfortable rebooking?

Consider the Plight of the Dive Operator.

Imagine for a moment that a few years ago you put your nest egg into a tropical resort with ten cabanas on five acres, with diving out front and great reefs nearby. You were 60 percent booked for April -- let's say $1500/person/week, or $72,000 -- and had 30 percent of your cabanas booked through December, with half the money, $117,000, in hand, for a total $189,000. You've already purchased some food, a lot of supplies, you've added a second dive boat, you have a year's contract with your Australian divemasters, maybe your chef and your manager, you have a staff of 20, many of whom live on your property, you're paying off the loan, the insurance, and taxes. You have already spent a third of that -- $63,000 on operations, have a monthly set commitment of $10,000 through the end of the year, so you're left with $54,000 on hand. You have no foreseeable income for the rest of the year, since every last soul has canceled. And now, everyone wants their money back, all $189,000.

With people counting on you for their livelihood, you're on the verge of going under, your dream shattered in just one short month. How do you manage the money, the demands of the guests, the demands of your creditors, and your obligation to your employees when you have no idea whatsoever if or when divers will once again show up and fill your beds?

That scenario is playing out in hundreds of dive destinations (and millions of small businesses worldwide) this very moment. The truth is, most operators have failed to follow the textbook: build enough capital to weather any storm and use payments for future trips on the direct costs of future trips, not for current day-to-day operating expenses. But, few small businesses were ever in a position to do that.

A credit for future travel will have a major impact on the health of the industry.

Operators everywhere have flat out shut down, some not even answering emails or phone calls. We've been told the owners of that fine operation on Roatan, Turquoise Bay, laid off their employees, locked the doors, and left the island. Many are trying to cope, doing the best they can for their employees. It's not easy. Karin Van Beeck (Bali Diving Academy, Permuteran) told Undercurrent, "The company we work for is trying hard to keep paying our staff a partial salary for another month or two, but it might be six months or more before we see tourists again. We are lucky in that we have been saving money the last years so we can manage without an income for a while. We are terrified for our staff, though. We have 20 people working for us, and most of them support extended families. Here no job means no money and no government support. Once the money runs out, people here are going to start going hungry. Forget being able to pay off loans or basic necessities -- they will not even be able to keep food on the table."

Many dive operators are seeking donations to cover their displaced staff. CoCoView, for example, has set up a GoFundMe appeal. Casey Shaw (Portsmouth, VA), whose next visit had been planned for April, wrote to Undercurrent to say, "A canceled vacation may be an inconvenience to us, but the absence of tourist dollars is catastrophic to islanders who depend on the tourism economy to feed their families. We may be home, but we are not helpless." By April 1, they had raised nearly $18,000. Now is the time to similarly check on your favorite dive destinations to see if you can help. As for CoCoView, go to:

And What About the Middle Man, the Travel Agents, Tour Group Leaders, and Dive Stores?

These folks are really caught in the middle. They have taken clients, arranged their entire trips, including airlines, hotels, dive operator, in some cases entire side trips, collected their money, and, depending upon how close to departure, paid some if not all of the money to the vendors. Imagine the stress of dealing with a single client who is out-of-pocket, but think how difficult it must be with a group of 20, particularly if you have already paid all the vendors. They want their money back, and you don't have it to give back.

Wayne Sentman, Director of Conservation Travel Programs at Oceanic Society, explains that "operators should not be using the trip payments for 'operational costs,' but they can use those 'unearned trip payments' for costs directly related to the trip -- like charter deposits or hotel room deposits. Usually, a provider's terms and conditions and deposit deadlines take that into account. So even a 'good' operator can be challenged to return 100 percent of trip payments if the trip has to be rescheduled or postponed (as in the case of coronavirus), and deposits have already been paid out to in-country partners. This is especially true when a trip is less than 90 days out. In many cases, operators can 'recover' that money only as credit for a future booking -- but if the client cannot reschedule the trip at the new dates or does not feel comfortable doing so, then the trip fees may truly be not fully recoverable.

"Many operators (if they can) will then try to offer discounts to equal that amount (unrecovered trip fees paid) on trips a client may book in the future. My main point is that even if they are doing everything as they should be (not spending unearned trip monies on operational expenses), a tour operator can still have trouble with 100-percent refunds if the client cannot reschedule -- or deposits that have been outlaid to a service provider are not recoverable or transferable.

Consider that some resorts and operators could possibly close doors maybe for a year.

Wendy Simon, who runs Snorkeling Etc., wrote to us on March 26 to say, "I am a wholesaler specializing in dedicated snorkel trips. I have a charter booked for May 9, 2020, in the Gardens of the Queen, Cuba. I booked with Cuban Diving Center, which owns the Avalon liveaboards. Avalon is refusing to refund any amount of the full payment or even give a future credit until 2022 (assuming they are still in business). I would never stiff my clients, and this could mean a devastating loss of $65,000. I'm open to any and all suggestions."

We wish we could offer advice, but trying to recoup losses from small operators--- probably any operators -- in the remote places divers go -- Cuba, Indonesia, Philippines, Mexico -- will be impossible if they don't voluntarily solve the problem. Some divers will work hard to hold the wholesaler responsible, others will shrug their shoulders. As Sentman pointed out, good operators may very well be in difficult positions.

Jenny Collister, who owns Reef & Rainforest Dive & Adventure Travel, told us, "I have been in travel for 34 years (Aussie domestic pilot dispute, 9/11, SARS, hurricanes, cyclones, terrorists, boat sinkings, you name it, I have been through it), and this is unprecedented . . . Reef & Rainforest is asking our suppliers to extend the same credit policy to physicians that are wanting to cancel vacations to destinations without travel bans so they can remain at work as medical facilities become overwhelmed . . . We are doing our best to negotiate this ever-changing landscape by staying on top of every new development . . . We will do our best to obtain credits for future travel. The resorts and liveaboard still have costs (payroll, fuel, insurance, and the list goes on), even if the customers cancel. I hope that the dive traveler will understand that a credit for future travel, rather than a refund, will have a major impact on the health of the industry. Reef & Rainforest is passionate about what we do and cares deeply about our customers and the financial stability of our suppliers.”

For the traveling diver who uses travel agents, it's some comfort to know they have someone in their camp, someone representing hundreds of divers, who bears some clout and may get you whole.

Yet, the problem runs deep, as Dominick McCann from Dive Advice told Undercurrent. "The dive travel industry is entering what could be a long, dark period, from which none of us will emerge unscathed. I wonder how many in the industry (agents, liveaboards, resorts, fleets) have the financial wherewithal to weather the inevitable cancellations. I think it depends on how long this continues to plague us . . Most clients are requesting postponement and/or re-scheduling of their trip, and fortunately, the majority of operators are cooperating. But, that alone is going to have a heavy impact on cash flow and bottom line for everyone . . . we are doing everything we can for our clients . . ."

Will Travel Insurance Bail Out Some Divers?

As for individual travel insurance, the letters and conversations we've had with divers indicate most are finding their insurance will pay nothing. Cancellations due to "worrying" about the virus aren't covered; many policies don't cover problems with airline cancellations or resort closures -- the assumption is the carrier and the resort are responsible. And we're finding that's not true.

Robert Levine says, "I am booked on the Nautilus for the great white shark diving. I left a deposit with my local dive shop of $1810, half the full price. Was told to buy trip insurance. I called DAN and asked about being covered for coronavirus, government closing of airlines, borders closed, etc. -- not covered. I was also told the entire trip was not refundable. Buy trip insurance. But it's also a loser; more money wasted." On April 3, we asked Levine if any progress had been made. "I got no news from the dive shop or Nautilus. My dive shop in Florida is closed. No refund, no rescheduled trip."

About the only people getting their money back are those who took out "cancel for any reason" policies, but those policies are not a slam dunk. Depending upon one's age, those policies add 40-60 percent more to the already high cost of travel insurance, and refunds are capped at 75 percent, plus or minus, of the expenses. If an operator allows you to rebook, then that may not qualify for a refund.

Most travel policies allow one to cancel them and get a refund within a set number of days of taking on the policy. Some travelers have found that after they canceled their trip, their travel insurance companies agreed to extend that policy to the next trip at no additional charge. Not DAN, says subscriber Tim Martin (Stockton, NJ), who tried to get a refund on unused travel insurance with DAN after his trip to Bonaire was canceled. "Our tickets, State Department warnings, Dutch Government border closures, canceled airline routes, and stay-at-home warnings, are not sufficient to process a credit or refund. Kyle at DAN has been polite and helpful, but DAN's insurance appears to be inflexible on this matter." If you try to cancel a travel insurance policy after their allowable cancel date, don't expect a refund, but because the travel insurance industry is in great disarray, keep trying to get the policy extended if you are rescheduling the same itinerary.

Some divers are turning to the insurance offered by their credit cards, which differs widely from card to card. Others have tried to cancel charges made to their cards.

Is Anyone Offering Money Back?

We have heard from a few operators offering money back, but they are rare. In the early days of the virus - three weeks ago - Lahaina Divers started refunding those who requested it because "we do not want sick people on our charter boat. We also started greeting divers checking in for charters at the front door, and, per USCG Bulletin, screening for symptoms and fever. Those with both are refunded and not allowed on the charter."

Nat Rob, the owner of Indepth Watersports in Grand Cayman, says they are offering full refunds or rebookings. "It is our hope that everyone remains safe and healthy. Looking forward to seeing you after this passes. We could really use your business and support!" Alison Dennis (Scuba with Alison of Cozumel) says, "I am offering full refunds for anyone canceling their dive trips due to the coronavirus outbreak. I am not even taking deposits." And Hanna, at Critterjunkies in Ambon, Indonesia, says, "Our dive center offers free cancellation for all our guests who have to cancel or reschedule their trips due to COVID-19 . . . We are all sitting in the same boat, and we have to help put each other as good as we can in this situation." And Joshua Ptasznyk, who won Kosrae Nautilus Resort in a raffle, says, "We are offering refunds on room and diving packages, though not much business at present as it's becoming difficult for guests to come in."

While most people would prefer to get their money back, such demands will have a serious effect on the industry. Margo Peyton, who for 20 years has run Kids' Sea Camp Inc., taking families around the world to dive, is deeply concerned about the industry's future. She says, "I work with many operators around the world. How can we better support our dive resorts, dive shops, and dive operators through this difficult time? We as an industry need a voice for them. We need travelers to be understanding and supportive by not putting the full weight of all financial trip loss for COVID-19 on their shoulders . . . Consider that some resorts and operators could possibly close doors, maybe for six months or a year, and try to then open up or have to stay closed. Some will be offering full credits and a change of dates without fees to help travelers out. Worse for them will be offering huge discounts, maybe deals that don't even make financial sense because they need to create revenue. They are trying to avoid refunds altogether, as that is not a possibility for most. We could best support them and explain to travelers that the weight of the world's financial loss is not and should not be on their shoulders to carry for our industry. We would be happy for them to offer some credits for trips purchased in whatever capacity they have to provide that."

The upshot of what Margo is saying is that, in the struggle refund customers, or to move bookings to future dates at no charge, as well as offer deals to get new customers back, these resorts -- maybe hundreds -- will just not survive. And that hopefully, divers will assume some of the burden.

I'm Ready to Plan My Next Trip

Many of our subscribers have told us they will travel as soon as they can and have asked if we knew of any future deals. That's a good reason to contact a travel agent, because, as Dominic told us, "there are literally hundreds, perhaps thousands, of incredible deals available . . As we begin to emerge from this crisis, that will be good for our clients, and the bookings will provide much-needed cash flow for the agents, liveaboards, and resorts that survive."

And for a traveling diver, travel agents will be the first to know what operations survived and the wherewithal to continue to survive. One must be careful of prepaid deals. Accepting one now for July might look feasible, but if planes aren't flying or the dive operator can't get back in business because of its own cash or staffing issues, those deals might become worthless. Of course, the industry wants our financial support, and of course, we want to support our favorite dive operators and undertake new adventures, but we don't want to invest foolishly. The fact is, many operators will not survive -- and we, should not take an operator's word alone. Looking for deals through a travel agent adds a second layer of confidence -- but no one will truly know whether an operator is solvent until the first guests arrive and report home. And, for some, that won't be enough.

Furthermore, travel insurance may be less of a help than it has been, and in the year of the virus, it's been of no help to most travelers. Christopher Elliott, a travel consumer watchdog with a syndicated newspaper column, writes that in just the last few weeks, many travel insurance companies have stopped selling policies altogether, new policies now come with far more limitations, and cancel-for-any-reason insurance policies, if they are written at all, will have significant new restrictions. When you're ready to depart for that next dive trip, you will not have the assurance that your travel insurance policy has your back, a lesson a lot of dive travelers have learned already.

And Now What?

Well, for one thing, there will be far fewer dive operations and no telling when you can get to them.

But, for those divers who paid good money for a trip and had that trip evaporate with no chance of a refund or scheduling a new date, let me suggest that you will have a better perspective if you don't consider this lost money. Had you made the trip and returned home, you would have had the same money in the bank as what you currently have. What you lost was the incredible experience of long hours underwater cruising over corals and observing remarkable animals. You missed the camaraderie of fellow divers, good chats over dinner, seeing others' photos and videos, the experience of the local culture, an all-around great time. It's not money that was lost; it is the experience and memories you could now be sharing. And that's a damn shame.

Now, go celebrate. You are still alive and there's more diving to be done.

- Ben Davison and John Bantin

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