The travel industry responds to world events

In an effort to reassure skittish travelers after the outbreak of fighting in Iraq, many major airlines—including Continental, American, and United—relaxed their cancellation policies, allowing passengers to reschedule trips without penalty as long as flights were rebooked by mid-April and completed by the end of December. Hotels, tour operators, and cruise lines soon followed suit, adding insurance policies and, in some cases, even forgoing cancellation fees altogether.

By mid-March, Starwood, InterContinental Hotels Group, and Radisson were all waiving cancellation charges, giving travelers approximately one month to cancel or rebook. Ritz-Carlton is giving guests until June 18 to cancel stays through the end of the year, as long as they rebook by mid-September 2004. But these deadlines are not locked in; Starwood, for one, will continue to reevaluate its policy as events unfold.

In the wake of September 11, many tour operators issued their customers full refunds or credits. Rather than absorb such losses again, outfitters like Butterfield & Robinson and Tauck World Discovery have either devised new insurance policies or reinstituted old ones. B&R's Peace of Mind Protection Plan—roughly 33 percent more expensive than its standard plan—gives a full refund or credit for travel through the end of the year. Tauck's plan (which has been in place for more than 20 years) offers an any-time, any-reason cancellation policy for all land-only tours; this includes a full cash refund. In mid-April, Abercrombie & Kent was giving customers full credit in exchange for a $250 fee, and Crystal Cruises and Seabourn instituted insurance plans allowing passengers to cancel and still get a 90 percent credit for a future trip; Silversea's Reassurance Program grants 100 percent credit.

While most industry spokespeople say they'll remain responsive to world events, Forrester Research travel analyst Henry Harteveldt thinks these policies will end as the conflict in Iraq winds down. "I expect airlines, hotels, and cruises will say, 'Okay, we've been generous. The worst is over—no more cancellations,'" says Harteveldt. However, SARS and the threat of renewed conflict should keep the industry on its toes.