A support package for travel agents will keep them afloat so they can recoup the costs of cancelled holidays, a tourism business boss says.
Flight Centre NZ managing director David Coombes said the $47.6 million 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.”
Consumer Affairs Minister Kris Faafoi announced the scheme today, and said it would increase the likelihood of consumers recovering refunds and credits owed to them.
The government estimated that almost $700 million in travel expenditure was locked up overseas because of trips cancelled due to the novel coronavirus.
“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.”
Coombes said the fund would allow the agency sector to keep trading, so it could focus on returning clients’ funds.
“It’s a rebate in recognition of the costs of repatriating customers’ funds in an environment where the agency sector is not generating any revenue, but incurring costs to make sure we’re looking after our customers,” he said.
“The rebate will enable the agency sector to continue to trade to ensure we can use our expertise to continue to process refunds and redeem credits for our customers.”
Faafoi said the government wanted the money back into the local economy as quickly as possible.
He said travel agencies would be paid 7.5 percent of the value of cash refunds and 5 percent of the value of credits successfully secured on behalf of consumers.
“This will mean, for example, that if an agent recoups $10,000 in a cash refund on cancelled travel, the customer gets that money back and the agent will receive $750.
“If it’s a credit for the $10,000 cancelled travel, the customer gets the credit and the agent receives $500.”
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.
“We’re supporting domestic tourism where we can.
“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.”
Faafoi said details such as eligibility would be worked through over the coming weeks.
He said the move was in line with the range of other support the government had offered in the wake of Covid-19, such as the wage subsidy scheme.