04/12/2012 07:59 am ET Updated Jun 06, 2013

Direct Air Shutdown Ruins Vacation Plans

By Mitch Lipka

April 12 (Reuters) - Jocelyn Floyd was waiting with her kids at the airport in Springfield, Illinois, for a flight to Florida in March when the fun spring break trip was replaced with jarring news: not only was the flight canceled, but the carrier had suspended operations.

Floyd was among thousands of passengers of Myrtle Beach, South Carolina-based Direct Air - a charter service with regularly scheduled flights to 17 cities - whose vacation plans were roiled when the carrier abruptly shut down on March 13. Two days later, Direct Air's parent company, Southern Sky Air & Tours Llc filed for bankruptcy protection.

Floyd's unexpected stranding highlights just how precarious travel plans can be as families and young people across the United States gear up for warm-weather vacations. And with many consumers still struggling financially, more importance is given to winning the future business of people who plan vacations.

"The last thing they would want was a customer to leave dissatisfied; then they wouldn't have them coming back when the economy improved," says Joseph A. McInerney, president and CEO of the American Hotel and Lodging Association.

Hotels and resorts stepped up their spending on training in the second half of 2011, he says, indicating a continued commitment to trying to please guests.

During the toughest economic times over the past several years, the hospitality industry realized that bad experiences for customers could take on larger importance - like losing business down the road, not only at one hotel, but at an entire chain.

"They (consumers) have more choices. If they have a bad experience with you in 2009, in 2010 they might go to a different brand," McInerney said.

Beyond just customer service, for those readying for summer vacations, National Consumers League Vice President John Breyault urges consumers to take a deep breath before buying into something that seems to be a great deal..

Brochures and websites can make even a rickety old ship look like a luxury cruise liner. That means doing your "due diligence," Breyault said, by not relying on references provided to you, but ones you find on your own.

Among other things, consumers should check the Better Business Bureau site and comments posted to travel review sites to establish what can reasonably be expected. It makes sense, given the cost of vacations, to be extra careful.

"These are fairly high dollar products you're buying basically sight unseen," Breyault said.

College students, in particular, can be vulnerable to the over-hyped vacation package. Once one or two have roped in, it's easy for a group mentality to take over and have others sign on without doing any checking. Some packages come loaded with fine print that have led to some very unpleasant surprises.

"We've heard horror stories from kids who get these deals to go to Cancun, for example," Breyault added.

In the Cancun situation, Breyault said the resort was nothing like expected, so the vacationers decided to leave. But the terms of the deal required them to stay at the resort and they forfeit their return trip, stranding them in Mexico.

In addition to always doing research before booking a trip, Breyault urges consumers to always use a credit card to pay so they have an intermediary help them recover what has been lost.

Consumers planning a particularly costly trip should also consider trip insurance.

Christopher Elliott, a consumer advocate and ombudsman for National Geographic Traveler, cautions that it is imperative to know what is and isn't covered in a policy, since terms can vary widely. An inexpensive policy could have a lot of exclusions, while a "Cancel for Any Reason Policy," which offers extra leeway, could add well over 10 percent to the cost of a trip.

Normally, consumers have 60 days after receiving a credit card bill to initiate a dispute on an erroneous charge. Even if the purchase was made earlier than that, there might be some hope in cases where there was something more than an error, said attorney Edgar Dworsky, who runs the website.

"Consumers will have the best chance at getting a refund by writing to their credit card issuer and requesting a charge-back for the portion of their airfare that was not honored," he said.

But that's not money that comes immediately, making it a hard pill to swallow for consumers, especially for people who thought they were doing the right thing by planning vacations in advance.

Floyd is going through her credit card company to try to recoup $676 in lost airfare and make the best of the ruined trip.

Calls made by Reuters to Direct Air went to a recorded announcement saying their offices were closed and callers were directed to the company website for more information. The website suggested consumers go to their credit card companies to try to obtain refunds and also read the guidance put out by the U.S. Department of Transportation that includes the contact information to make claims against Direct Air's bond and escrow.

"It has been disappointing," Floyd said.

To replace the visit to Florida, she decided to take her kids to Chicago to see her brother and his family and then tour colleges in Missouri.

"I made lemonade out of my lemons," she added. "I'm showing my children that we can make the best out of a bad situation." (Editing by Beth Pinsker Gladstone and Andre Grenon)