Great news! Travel agents in New Zealand have been thrown a $43million lifeline from the Government with a pioneering scheme to help them recover around $645million spent overseas on travel by Kiwi travellers pre-COVID-19.
The new Government ‘consumer travel reimbursement scheme’ launched today by New Zealand Consumer Affairs Minister Kris Faafoi aims to assist in facilitating getting refunds for New Zealanders who still have money tied up offshore because of cancelled travel plans as a result of COVID-19.
The breakthrough initiative for consumers, travel agents and the wider industry aims to help support agents in the recovery of ongoing refunds and credits from overseas travel suppliers including airlines, cruise lines, wholesalers, and hotels.
Here’s how it works
- The New Zealand Government has essentially created a ‘consumer travel reimbursement scheme’ to help the return of monies owed to New Zealand consumers via travel agents.
- The scheme will be funded to a maximum of AU$43 million.
- Travel agencies will be paid 7.5 per cent of the value of cash refunds and;
- 5 per cent of the value of credits successfully secured on behalf of their client
- For example: If an agent recoups $10,000 as a refund on cancelled travel, the client gets that money back and the agent will receive $750.
- If however, it’s a credit for the $10,000 cancelled travel in total, the customer gets the credit and the agent receives $500.
Aside from restoring some much-needed consumer confidence in the travel industry, the news will provide some welcome breathing space for agents who have spent the last seven months essentially working tirelessly for free to recoup their client’s money.
A key point that has been missed in most of the mainstream media’s attacks on travel agents.
To date, the travel sector and the New Zealand Ministry of Business, Innovation and Employment estimate that around $645million of Kiwi’s money is still tied up because of cancellations due to COVID-19.
Speaking about the current situation, Consumer Affairs Minister Kris Faafoi said: “We know the travel sector and their customers have taken a massive hit due to the disruption caused by COVID-19.”
“The Government’s been working with the sector to find a way to help agents assist their customers to get back money that they are owed by travel suppliers,” he said.
Speaking to RNZ in New Zealand, Flight Centre NZ managing director David Coombes said the consumer travel reimbursement scheme announced today was good news for the industry.
“There’s still a long road ahead but we’re pleased to be getting some much-needed support in what has been an incredibly difficult time for travel agencies in New Zealand.” He said.
Meanwhile, Faafoi said the government wanted the money back into the local economy as quickly as possible.
He said many of the outstanding bookings that remained stalled were complex to put in place and are complicated to unwind.
“That’s where the expertise of the sector is crucial to help consumers get back money tied up in stranded bookings.”
Coombes said agents would in the short-term be focused on retrieving clients’ money as opposed to booking overseas holidays.
“It’s fantastic to be able to redeem some of these credits towards domestic tourism and help out the operators who need a hand because they’re as impacted as we are by the border closures.” He said.
The ‘unified in a time of need’ group lobbying for the support included: David Coombes (managing director of Flight Centre NZ), Mark O’Donnell (chief executive of House of Travel), Malcolm MacLeod (chief executive of First Travel Group) and Simon McKearney (executive general manager Helloworld).
Meanwhile, in Australia, The Australian Federation of Travel Agents (AFTA) has called on the Federal Government to provide a ‘Travel Agent Support Package’ of $125m as well as a range of business relief measures to help travel agents survive the pandemic.
Speaking about the current plight of travel agents when announcing the news last week, AFTA CEO Darren Rudd said: “This is a critical time for our sector and unless we all work together, there are many businesses which will not survive. We don’t want that to happen. This is a sector which has spent generations helping Australians get overseas for commerce and culture, family and friends reunions and now it’s time for our society to help them in return and in doing so help restart our economy.”
The Council of Australian Tour Operators (CATO) also recently released a discussion paper to spark dialogue around the two most important topics of feedback they have received recently. Namely, Consumer protection and the reform of ATAS.
CATO says the document intends to create debate and discussion on these topics and stakeholder feedback will be sought from industry participants and affiliations including AFTA and Cruise Lines International Association (CLIA).
To download CATO’s full discussion paper, please click here.