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Covid-19 Pandemic

Dáil Éireann Debate, Wednesday - 20 May 2020

Wednesday, 20 May 2020

Questions (1018)

Mary Lou McDonald

Question:

1018. Deputy Mary Lou McDonald asked the Minister for Transport, Tourism and Sport the details of the proposal to back a refund note that travel agents and tour operators can offer customers who have had to cancel bookings due to Covid-19; the circumstances in which a refund note would apply; the State guarantee proposed for such a note; and if he will make a statement on the matter. [6418/20]

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Written answers

The Government has approved special support measures with respect to travel agents and tour operators in the form of a State-guaranteed Refund Credit Note, which can be offered instead of cash refunds in the secure knowledge that their value is underwritten by the State.  The EU Package Travel Directive places stringent refund obligations on the sector, which clearly did not foresee the catastrophic level of cancellations caused by the Covid-19 international travel restrictions, and meeting these obligations is putting incredible financial strain on the sector. Their situation is made particularly difficult as they are not in receipt of refunds from suppliers and future bookings have all but ceased.

The idea behind the Refund Credit Note is that the tour operators/travel agents may offer customers the option of the Note, which can then be used to book a future holiday or redeemed for cash at a later date.  Importantly the customer may still opt for a cash refund, but if they accept the Refund Credit Note, it will work as follows:

1. It can be to the value of all of the refund due or part of the refund alongside part cash.

2. 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.

3. 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 - along with associated immediate job losses - and the rights of consumers to proper protections.  The final touches are being made to the legal provisions to give effect to this, and I expect to introduce the necessary Ministerial Orders shortly.

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