Lowry tells Dail that Irish Travel Agents are facing extinction

Deputy Michael Lowry has told the Dail that, although there is a major focus on travel at present, there is a sector of the industry that is facing extinction unless they receive urgent funding. Addressing the Tánaiste, Deputy Leo Varadkar, in the Dail, Deputy Lowry said that Ireland’s 190 licenced Travel Agents are currently watching their businesses fail and, unlike the other SMEs.

 

He added: "They have received little or no assistance. The Travel Agents and thousands of consumers across Ireland are caught stranded in the middle between an EU Directive and Government travel advice. Tánaiste, this is a matter that needs urgent attention and correction."

 

The Tipperary Deputy outlined that the Travel Agent sectors projections estimate that, as a result of the advice not to travel abroad, they will lose €120m of projected earned income, which comes largely from commissions and service fees.

 

Without the benefit of the TWSS, many Travel Agents would have already closed their doors as turnover will be down by 90% this year, he stated.

 

"All earned income to date from advance bookings is being handed back in refunds resulting in negative trading."

 

The Tipperary TD continued: "Advance bookings are practically at zero so businesses are looking down a black hole for the rest of 2020 and to the end of the first quarter of 2021. Travel Agents earn income when consumers pay balances. Unlike the domestic tourism industry, that can benefit to an extent from staycations, outbound travel agents have no fall back. However, Outbound and Inbound tourism rely on each other to generate passengers for airlines to justify operations’ he told the Dail sitting.

 

"Multinationals and SMEs depend on Travel Agents to properly manage their travel costs. Outbound travel agents also sell European holidays on the UK market and bring meetings, conferences, sports groups and a host of other visitors into Ireland.

 

"Travel Agents are the only SME where Government advice to consumers is against doing business. As a result Travel Agents are suffering enormously. Government agencies are advising consumers not to travel and to cancel the business that they have booked with Travel Agents.

 

"Travel Agents are not arguing against those advices, but it is the unintended consequences that are putting them in jeopardy. On average wages represent 60 % of travel agents overheads. Therefore, the continuation of the Wage Subsidy Scheme and other such assistances to the end of the first quarter of 2021 is critical to the survival of the industry and its 3,500 jobs.

 

"But greater assistance is urgently required. Travel Agents were excluded from applying for the Online Retail Scheme in the first round of Grants, as they are considered as only providing a leisure service. They have made their case that Travel Agents are more than a leisure service provider. Some are vital to multinational companies in Ireland and provide other services that are not of a leisure nature.

 

"Travel Agents should not be excluded from the upcoming round of financial supports for SMEs or from applying for certain Grants that may evolve due to a misconception of the level and type of business service they provide.

 

"I am asking that the Government put a fund in place without delay to assist Travel Agents. This has been done for other Covid impacted businesses throughout the country. The Government advice is not to travel. Thousands of people who have followed that advice have cancelled flights and holidays. Most of these cancellations are package holidays which include, flights, transfers and accommodation. A ludicrous situation exists under an EU Directive whereby the Travel Agent is legally responsible to secure the refund of the entire package. This is simply not financially sustainable.

 

"It is a travesty and incredibly unfair to expect Travel Agents to shoulder the burden of this financial outlay. It will force them into liquidation. Ironically the Travel Agency Bonding System to protect consumers when agencies collapse only becomes active and effective after a Travel Agent goes into liquidation. This entire issue needs urgent attention.

 

"The Tánaiste acknowledged the plight of the Travel Agents, saying they are largely locally owned and often family owned businesses and that ‘we want to make sure they survive’ He said that they have benefited from the TWSS, the Refund Credit Note Scheme, the waiving of rates and that they can avail of the Re-Start Grant and possibly benefit from the July Stimulus Package to be unveiled next week."

 

He said that he had received previous correspondence from Deputy Lowry in relation to the Online Retail Scheme, which is an Enterprise Ireland Scheme, but that all funding under the scheme has now been allocated. ‘I take your point, Deputy Lowry, and it is a very valid point and, if this scheme re-opens this sector should be included for funding’ concluded the Tánaiste.