Transport and tourism minister Shane Ross has secured a temporary bailout for travel agents in the form of a state guarantee for travel refund credit notes.

The credit note will apply for package holidays booked through Irish registered travel agents and tour operators.

Ross noted that travel restrictions have led to many people having to postpone holiday, wedding and honeymoon plans. Under the EU Travel Package Directive, people who have had to cancel such bookings are entitled to a cash refund.

“That entitlement will continue to apply,” Ross added. “However, it is also the case that many travel agents and tour operators are having severe cashflow 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. The government has therefore agreed to back a new refund credit note that travel agents and tour operators can offer their customers.”

The refund credit note will work as follows:

In Association with

• It can be to the value of all of the refund due or part of the refund alongside part cash.
•  It will be issued with a future redeemable date, and on that date it can be exchanged for its cash value, or can be used to book a replacement holiday.
•  It will be state-guaranteed in the event that the travel agent or tour operator becomes insolvent.

“The refund credit note aims to strike a balance between preventing sector-wide bankruptcy with associated immediate job losses and consumer rights,” the minister said.

For holiday makers the announcement means that they won’t get their money back immediately but at some unspecified future date.

The travel sector is estimated to employ c.3,500 people, mainly in small, family-run businesses. According to the Irish Travel Agents Association, travel agents are financial stretched as for holiday bookings in most cases flights have already been paid for.

“With airlines refusing to refund travel agents the cost of the flights, it is impossible for ITAA member travel agents to provide all customers with full refunds for bookings,” the ITAA said in a statement.

CEO Pat Dawson stated: “The implementation of credit notes for affected customers may help to protect otherwise healthy businesses that are suffering financially as a result of the current situation with the coronavirus.”