State to guarantee refunds for package holidays in form of credit notes

THE State will guarantee refunds for holidaymakers as ministers approve support for travel agents hit by the Covid19 crisis.

Tourism Minister Shane Ross brought the plans to protect the travel industry to Cabinet.

The help is to come as a State guarantee, in the form of a refund credit note for package holidays booked though Irish-registered travel agents and tour operations.

The notes can be offered by the travel industry to customers in circumstances where they are not able to provide a cash refund or a full cash refund.

The credit note can be to the value of the full refund, or a partial refund alongside cash.

It will be redeemable for its cash value after six months and can be used to book a replacement holiday at any stage. The credit note will be State guaranteed in the event that the travel agent or tour operator becomes insolvent.

Mr Ross said these are very difficult days for consumers who have booked holidays.

He also said it’s been difficult for the tourism industry and many travel agents and tour operators.

The refund credit note is said to be an attempt to strike a balance between preventing sector-wide bankruptcy with associated job losses and consumer rights.

“The travel restrictions imposed in response to the pandemic have led to the widespread cancellation of holidays during March, April and May, with many people having to postpone holiday, wedding and honeymoon plans,” said Mr Ross.

He added that under the EU Travel Package Directive, people who have had to cancel bookings are entitled to a cash refund, and that entitlement will continue to apply. “However, it is also the case that many travel agents and tour operators are having severe cash-flow problems, and it is not clear that all of them will be able to meet all of their current cash refund obligations and at the same time be able to stay in business,” he said.

“The Government has therefore agreed to back a new refund credit note that travel agents and tour operators can offer their customers.”