Covid 19 Delta outbreak: Travel agents want refund scheme extension

A group representing travel agents say Consumer Affairs minister David Clark doesn’t appear to care about New Zealanders who have up to $500 million in payments for trips locked up overseas.

Struggling agents want a small extension of a scheme where they are paid commission by the Government for travellers’ funds they recover.

Unclaimed commission of about $16 million from a fund already allocated by the Government will be difficult for struggling agents to earn, Travel Agents Association of NZ president Brent Thomas says.

That amount could be crucial for those agents clinging on in the sector who have over the last month been dealt a fresh blow by the latest border failure and resulting lockdown.

Thomas said agents had repeatedly appealed to Clark – who has the commerce and consumer affairs portfolio after losing health last year – but he has rejected calls toexpand the scope of the scheme.

“We’ve heard so little from Minister Clark except from a pretty emphatic ‘no’, and yethere we are helping literally tens of thousands of New Zealand consumers.”

Thomas said the Government was turning a “blind eye” to the sector where numbers employed had fallen from about 5000 to 1500 during the pandemic.Most were women, mirroring figures for overall job losses.In many cases only agents had the ability to unlock deposits and payments for travel overseas which could be complex and, according to Taanz estimates, could still add up to $500m.

“I guess he’s voted by the way he’s spoken and he doesn’t really care about the New Zealand consumer and the $500m over there.That’s on him.”

Asked this week by the Herald whether Clark would review his decision in light of the latest lockdown and whether he was interested in the plight of agents, spokesman Sam Farrell said: “The minister has nothing further to add on this.”

National’s tourism spokesman Todd McClay had taken up the agents’ concerns with Clark before the latest lockdown but said today he had heard nothing back from the minister.

Thomas said this past month’s lockdown had been doubly hard on agents.Not only had business dried up but they had to deal with tens of thousands of cancellations and rebookings.Even though there was little long-haul international travel to re-arrange, the Cook Islands had been proving popular after the end of the transtasman quarantine-free travel bubble.

“We’re dealing with a whole lot of people now who are cancelling which means we have to unwind some of their income streams as well.So not only do we not have sales going forward but in many instances we’ll be losing income that we would have already earned.”

Although Thomas said the wage subsidy and business resurgence payments were welcome, travel agents were worse off under higher alert levels as they had very few sales and other fixed overheads.

Some domestic travel will resume under alert level 2 outside Auckland but trips around New Zealand make up only a fraction of agents’ business compared to pre-pandemic.

Agents were also frustrated with changes outlined to the MIQ system, Thomas said.

The random system announced didn’t link hotels with airlines or utilise the existing capacity well.The travel industry had more than 150 years’ of experience in booking systems and he said the Government’s scheme didn’t tap into this.

“There are right systems that could be implementing right now because travel agents use them every day. It’s not hard, but it definitely seems to be inefficiencies in the system the way it’s set up.”’

A silver lining

The rush to get vaccinated because of the Delta strain outbreak would be good for travel, agents and the country in the long term, Thomas said.

“We’re totally behind the Government needing people to get vaccinated so we can safely open the borders and move from having protection at the border level down to an individual protection level,” he said.

“At the end of the day all we want to do is be able to run a successful business and that requires, you know, people being able to move freely.”

But the travel industry is looking for more clarity around the re-opening of borders.

Just before the latest lockdown, Prime Minister Jacinda Ardern outlined what could happen from the beginning of next year.

“The Government did state the borders are going to opennext year, based on making available vaccines to every New Zealander, and now they’re on target to deliver the vaccine side of things,” he said.

“We’re now 16 weeks away from the start of the next year. What’s the plan around defining low-risk countries and medium-risk countries?”

Agents expect a surge in leisure bookings once Kiwis know the timetable for reopening.

Covid Response Minister Chris Hipkins said today that while the resumption of quarantine-free transtasman travel was “a fair way off”, the wait for borders to open wouldn’t be 12 to 16 months away.

He said plans to run a quarantine-free trial for vaccinated travellers to isolate at home remained on track to run before the end of the year.

Thomas said he was confident business travel would bounce back.

A survey by Bloomberg revealed last week 84 per cent of 45 large businesses around the world plan to spend less on travel post pandemic than before it.

“There’s definitely going to be a need for it [business travel] because businesses need to reconnect with customers and suppliers as the supply chain has been severely hammered over the last 18 months.”

Duty of care responsibilities on businesses meant it would take years to get back up to 2019 levels.

“But40 per cent to 50 per cent is probably something that’s fairly achievable by the end of 2022 and it could be even higher than that.We’ll have to wait and see but their indications are that the corporates will start to travel in a meaningful way,” he said.

Consumer Travel Reimbursement Scheme

• As atJuly 31,$31,046,457.59 (excluding GST) had been paid to agents.

• The scheme was launched in October 2020 and is funded to a maximum of $47.2 million. It pays New Zealand-based travel agents 7.5 per cent of the value of all cash refunds they are able to successfully recover for their customers, and 5 per cent of the value of all credits successfully secured or rebooked for international travel.

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