New Zealanders who have money locked up offshore due to cancelled travel plans as a result of COVID-19 will benefit from a new Government scheme to support the recovery of refunds and credits from overseas travels suppliers.
“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,” Commerce and Consumer Affairs Minister Kris Faafoi said.
“We will provide a consumer travel reimbursement scheme to assist the return of credits to New Zealand consumers via travel agents. The scheme will be funded to a maximum of $47.6 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 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.
“The travel sector and the Ministry of Business, Innovation and Employment estimate around $690 million of New Zealanders’ money is locked up because of travel cancelled due to COVID-19.
“We want to get that money back for Kiwi customers and into the local economy as quickly as possible. The scheme we are announcing today will help those in the travel industry with financial support to facilitate the recovery of those funds,” Kris Faafoi said.
“I know that travel agents and wholesalers have been working hard to recover refunds and credits owed to New Zealand consumers, but are under severe financial pressure, with many facing the prospect of insolvency.
Many of the outstanding bookings that remain 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.
“The travel reimbursement scheme will help increase the likelihood of consumers recovering refunds and credits owed to them. It will also give greater confidence to the travel industry by limiting further insolvencies.”
Minister Faafoi said that the scheme would be established as soon as practicable, with details such as eligibility to be worked through over the coming weeks.
Mr Faafoi said the move to help retrieve New Zealand travellers’ money 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.