Is this enough compensation? They canceled my Egypt tour, but all I get is a credit?

When an airline cancels a flight, you’re entitled to a refund. When a hotel turns you away, you get your money back. Same thing when your cruise is canceled or your car rental company doesn’t have the vehicle for which you prepaid.

But put it all together into a tour package, and curiously, the rules change. Just ask AnnMarie LaRosa-Gee, whose March 5 Egypt tour and Nile cruise was called off, for obvious reasons. Egypt is descending into anarchy, and is unsafe for any kind of tourism.

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LaRosa-Gee booked the tour directly, paying YMT $6,032. When the tour operator canceled, it offered her two choices: Either rebook the same tour later in the year or transfer all of her credit to a new 2011 tour.

“I could understand this if we had decided to cancel, but since YMT did, it seems like a reasonable expectation to receive a full refund,” she says.

Is this enough compensation? (If you can’t wait to answer, scroll down to take today’s poll.)

LaRosa-Gee and her mother bought YMT’s trip insurance, but it doesn’t cover political unrest. The fine print on YMT’s terms is tricky. It says, “a full refund will be made to all participants only if the cancellation does not result in a loss of monies to [YMT].”

So unless YMT gets all of its money back from everyone — and presumably that would include the tour guides on the ground who are busy conducting a revolution — then YMT doesn’t owe LaRosa-Gee a refund.

This appears to be an industry-wide practice. The US Tour Operators Association, the gold-standard for American tour operators, explains why on its site.

“When you cancel, a tour operator has already incurred expenses for advance reservations and arrangements, and may be liable for paying hotel and other services contracted on your behalf,” it says, adding that a company will “usually offer other departures or destination alternatives” when it can’t operate a tour.

As far as I can tell, YMT’s answer was within the industry standard, at least for certain cancellations. Once they take your money, it’s theirs and you should consider it spent. LaRosa-Gee might have avoided this problem by shopping around for a better travel insurance policy, although she wouldn’t have known to look for “political unrest” under the policy’s named perils. She could have also booked the tour through a knowledgeable travel agent instead of DIY-ing it.

But answering the question, “Is this enough compensation?” is not so easy. YMT might be doing the correct thing by offering her credit, but is it the right thing?

LaRosa-Gee wants to know. “I would appreciate your opinion and guidance,” she says. “Should I push for a full refund or must I comply with YMT’s offer? YMT is requesting a decision by this Friday, 2/11.”

Well, what do you think?

(Photo: David Ber kowit/Flickr Creative Commons)

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