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ITAA Calls on Government to Implement Credit Notes

ITAA Calls on Government to Implement Credit Notes

The Irish Travel Agents Association (ITAA) is deeply concerned by the current Covid-19 crisis and the impact it is having on member travel agents and their customers, and is strongly urging the Government to implement credit notes for holidaymakers whose holidays have been cancelled due to the worldwide pandemic.

Our news story has already received two comments, to which ITTN has replied. (See below.)

The ITAA said: “The travel sector is a strong and dynamic industry that employs over 3,500 people across Ireland, mainly in small, family-run businesses that have been operating for generations. As a result of the pandemic, many of these businesses have been left without income for the foreseeable future, and are under huge financial strain.

“Travel agents are experts in their field, and afford their customers a level of personal service and a sense of security that is absent when booking a ‘do-it-yourself’ holiday. Unlike airlines, travel agents are also highly regulated, licensed and bonded under the Commission for Aviation Regulation (CAR), which ensures the safety of the customer’s money should anything go wrong. As well as this, most travel agents are local businesses and an integral part of communities across Ireland, with many travel agents knowing their customers on a first-name basis.

“Travel agents are in a difficult position, as in most cases flights have already been paid for in order to ensure the best price for the customer. 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 is asking that these refund credit notes are fully bonded with the CAR.

“Since the widespread outbreak of Covid-19 in February, travel agents have been working hard around the clock to assist their customers by securing refunds and changing travel arrangements where possible. Travel agents have dealt with thousands of holiday makers over the course of this pandemic and many other crises that have occurred in recent years, always ensuring that the customer takes top priority.

“The ITAA is asking the Government to be mindful of the pressures faced by small travel businesses across the country as the coronavirus situation progresses, and to consider supporting the travel industry with the introduction of credit notes for affected customers. Travel agents are an integral part of local communities and it is vital that customers continue to show their support for local businesses.”

Pat Dawson, ITAA Chief Executive, added: “While the ITAA welcomes the support the industry has received so far, we are now calling on the Government to support vulnerable travel and tourism businesses during the pandemic. 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.

“Current Covid-19 travel restrictions have, regrettably, already resulted in job losses in the Irish travel sector. The ITAA is concerned that its members could be at risk of going out of business, and are looking for support and assistance from the Government during this difficult time for the industry.”

View Comments (6)

6 Comments

  1. David

    May 2, 2020 at 6:21 pm

    I am an outsider looking in as I brought it to the attention of the Commission for Aviation Regulator’s office about an Irish tour operator who seems to have been trading in Ireland for years with no licence. I asked CAR if they had a licence to trade and I was told “If you have an issue with them, take it up with the Department of Transport, Tourism and Sport”, but yet it is CAR that issues licences. The company is ‘Company A’ and has an affiliation membership with the ITAA advertised on its website, along with a so-called payment protection letter called ‘TOPP’ that is out of date.

    My point is that there is NO consumer protection by any bond held with CAR as CAR is repeatedly telling consumers to check with their credit card company if they have protection. The bond or bonds simply aren’t big enough to protect consumers and CAR is way over its head and is like a rabbit caught in the headlights. Right now, over 50% of Irish travel agents are unlicensed as their licences expired on 30 April and many of these unlicensed travel agents are members of the ITAA, so technically by law they should not be allowed to handle any cash or card transactions that are refunded (if they ever get refunded) because they have NO bond to handle such refunds.

    I respect the response from the CEO of the ITAA, who wants to protect its members, but, let’s face it, your sector has massive flaws and everyone seems to be pointing the finger at everyone else. The CAR has its head in the sand, travel agents have angry customers demanding refunds from airlines who are avoiding EU laws about returning such refunds. If I book with a travel agent and I paid everything to that travel agent, then it is the agent who has the responsibility to pay the refund. If they booked my holiday using, say, Aer Lingus flights and booked my hotel separately, then that is their problem. Consumers pay their money through bonded travel agents for the protection. Airlines are not bonded but travel agents are, so if a consumer wants his/her refund because their holiday was cancelled, then it is up to the travel agent to provide that refund. If they booked a consumer’s flight with Aer Lingus or Ryanair then they can wait for their refund from these airlines because they used their credit card to book the consumer’s flights, so any refunds from airlines to travel agents who used their business/travel agent credit card to book flights is technically nothing to do with the consumer. If the consumer booked a package with a travel agent, then the travel agent is responsible for issuing the refund.

    The whole travel industry protection system is flawed and these flaws are the responsibility of a Transport Act that is so out of date it is frightening and is governed by a Regulator’s office which has its head buried in the sand.

    Let’s see what happens to all the travel agent licences that are out of date from 30 April 2020 – and for God’s sake who is letting ‘Company A’ operate in Ireland. I can’t see a licence issued for ‘Company A’ or its limited business name and CAR won’t tell me otherwise, so maybe Mr Dawson, CEO of ITAA, should check on who their Affiliate Partners are and why the ITAA promote unlicensed tour operators/travel agents given the time he has spent preparing a statement to the Government.

    If a travel agent paid an airline with their credit card for their client’s flights, then that refund, voucher or credit note belongs to the travel agent and NOT the client, unless their Booking Conditions state otherwise, so any consumer/client is entitled to a full cash refund from their travel agent and the travel agent can wait for their refund from the airlines.

    Sorry to throw a spanner in the works but I have been scouring travel trade ezines like this because I am trying to find out what unlicensed activity ‘Company A’ have been doing.

    Your Sincerely,
    David.
    (A concerned consumer)

    • Neil Steedman

      May 4, 2020 at 3:30 pm

      Hi David. Thank you for your extensive comments, to which I will do my best to respond. First, please note that I have edited your comment to replace the name of the tour operator you specified with ‘Company A’.

      COMPANY A: This tour operator does NOT need a CAR licence because it does not sell flights ex-Ireland – it only sells tours commencing within the destination country. It is therefore operating perfectly legally and is an Affiliate Partner of the ITAA precisely because it does not have a CAR licence – which is a requirement for any company to be a full member of the ITAA. The TOPP policy on its website has an expiry date of 31st March 2020 – a date by which Company A, like other tour operators and travel agents, would probably not have been selling new business but may well have been busy trying to repatriate clients that were overseas and rescheduling clients who had booked but had not yet travelled. When overseas travel resumes, an updated TOPP policy should be included on its website.

      BTW: There are 45+ travel companies legally doing business in Ireland without a CAR licence. While Company A does have an established presence in Ireland, many of these other companies do not and therefore do not need a CAR licence, even if they do sell packages that include ex-Ireland flights. Many consumers may be confused by the fact that some of these companies use .ie websites, but this does not mean that they are ‘established’ in Ireland. Most of those 45+ companies are established in the UK and are therefore licensed/bonded by the UK Civil Aviation Authority and ATOL – and if they fail then it is to the UK that affected consumers would have to apply.

      CONSUMER PROTECTION UNDER BONDS: It is simply incorrect to say that there is no consumer protection by a bond – there IS, as many consumers can testify from several tour operator or travel agency failures in the recent (and more distant) past. In such cases the CAR, quite rightly, also advises any consumers who are NOT covered by a bond to check with their credit card company. For example, in its posting about the most recent failure of Flyaway Travel, the CAR advised consumers who may be covered by the consumer protection scheme, and then added: “Unfortunately, no other customers are covered by the scheme. If you are one of these customers, we advise you to look at the charge back policy of your credit/debit card provider and/or any holiday insurance you may have in place.” This is simply common sense.

      It is also worth pointing out that only approximately 15% of bookings (by value) are made with a licensed tour operator or travel agent, on whom much responsibility is placed by the EU Package Travel Directive and the Irish implementing legislation, and who, in the event of a company failure, work their asses off to assist their clients (and as they have also been doing in response to the Covid-19 pandemic). Consumers who make the other 85% of bookings directly with airlines and other travel suppliers may well find themselves in limbo, or on a long, long phone queue (if they are lucky) and can be left with nowhere to express their frustration other than on social media. For many consumers, the Icelandic ash cloud served to highlight the benefits of booking with a licensed and bonded travel agent. In addition, the ITAA, along with its European partner ECTAA, have been campaigning for several years for airlines etc. to be bonded so that there is a level playing field of consumer protection – sadly, so far without success.

      LICENCE RENEWALS: Technically you are correct that any travel agent whose licence expired on 30th April 2020 (other travel agent licences and all tour operator licences expire on 31st October each year) and has not yet been renewed as from 1st May 2020 cannot make bookings, but, in the current circumstances when travel agents and the CAR are coping with Covid-19 issues, in my view to raise this issue on 2nd May 2020 is a bit ‘quick off the mark’. Almost every year on licence renewal dates (1st May and 1st November) there are a small number of travel agents from whom the CAR are still awaiting information requested, but they soon get their licences. Those requiring a licence renewal from 1st May 2020 would have needed two or three weeks ago to include in their applications to the CAR their projected turnovers for the next 12 months. In a ‘normal’ year this can usually be done relatively easily by reference to their turnover during the previous year – but this is far from a normal year! Attempting to estimate what their turnover will be from 1st May 2020 to 30th April 2021 must have been somewhat of a crystal ball gazing exercise this year – and equally CAR’s attempts to determine whether those estimates are realistic. Having said that, my understanding is that the vast majority of applicants will have their licences renewed.

      REFUNDS: Firstly, the vast majority, some 80-85% of travel agents’ clients, are rescheduling their bookings, rather than asking for refunds. US airlines are paying refunds because they have been instructed to do so. Many (most?) European airlines are, as you say, currently not abiding by the EU261 regulation and are responding to the unprecedented Covid-19 situation (for which EU261 was not designed to cover) with offers of deferred refunds, vouchers or credit notes. The Department of Transport is well aware of the legal rights of consumers but also of the current financial difficulties of airlines and of tour operators and travel agents and is expected to issue its proposals on how to deal with it all during the coming week. The ITAA has recommended use of Government-backed credit notes and has stated: “Travel agents are in a difficult position, as in most cases flights have already been paid for in order to ensure the best price for the customer. 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 is asking that these refund credit notes are fully bonded with the CAR.” You say that “the travel agent can wait for their refund from the airlines”. That is not necessarily true – four travel agents have already gone out of business in Ireland due to Covid-19 and, regrettably, they may not be the last.

      • David

        May 4, 2020 at 10:46 pm

        Thanks your reply Neil… I won’t make reference to that company so will call them ‘Company A’ as you refer to them as this.

        Your reply seems to be adamant that Company A does not require a licence or are you assuming that Company A doesn’t sell, promote, advertise or refer travel overseas by air or land to meet their advertise tours, services and products?

        Yes they have representation in Ireland (with an office in Dublin) and to have a .ie domain you must have an Irish registered business and the have a limited company registered with the CRO, so they are Irish.

        Leaving that aside, the reason for contacting CAR was to refer them to the Transport (Tour Operators and Travel Agents) Act, 1982, Part II, Section 11, but the Regulator has turned a blind eye to my request and refused to answer a simple YES or NO question.

        So right now, I can set up an online travel business with a .ie extension and sell overseas tours legally, if I don’t sell flights, sea or land transport outside of Ireland? So that means I don’t require a licence or bond or be governed by the CAR? WOW!

        What a dangerous precedent to the correspondence I sent to the CAR and Mr Dawson (CEO of the ITAA) that the Transport (Tour Operators and Travel Agents) Act, 1982 is so outdated, it is frightening and yet travel agents year in and year out bust their butts trying to get bonds, when it would be much easier to operate like Company A and not having to bother applying for a licence. How many more travel companies can set up business like this and potentially damage ITAA travel agents and potentially take business away from them? But yet Company A is an Affiliate of the ITAA.

        Mr Dawson represents many hard working travel agents and tour operators, many of whom have little or no future or will struggle to even get a bond to trade again unless they present their own cash bond, but Company A does not have this issue, assuming they will remain solvent and able to trade this year.

        I am well aware of the 1982 Act but appreciate your input.

        Thanks for your reply. You are the only one who has replied to date and I hope that travel agents survive this as I am a supporter, hence my issue with CAR and Company A and I am waiting to book with my travel agent to travel again soon and I wish all licensed Irish travel agents and tour operators the best for the future and hope that the skies open for them to sell travel again.

        • Neil Steedman

          May 5, 2020 at 6:24 am

          Hi again David. Thank you for your further comments – and also for your support of travel agents! My reply will be shorter this time, but I hope it will still be helpful.

          Firstly, I was not so much being ‘adamant’ that Company A does not require a licence, simply stating the fact and the reason why. BTW: It uses a .com domain, not .ie – I simply referred to the fact that some OTHER companies who are not established in Ireland but who DO sell ex-Ireland packages also do not need a CAR licence (but will be licensed in the ‘home’ country).

          Secondly, and it’s only a small point, but the ITAA represents travel agents but not tour operators. It used to, and then there was an Irish Tour Operators Federation, which was at one time part of the ITAA but then separate, and then ceased to function as there became so few members. Also, the traditional clear distinction between ‘travel agent’ and ‘tour operator’ has blurred in recent years!

          Thirdly, your main point, if I may be permitted to summarise it, is that the current licensing and bonding system is not fit for purpose. My short response to that is: Yes, you are right, it isn’t. I might also add that the ITAA, and individual travel agents and tour operators, probably agree with you!

  2. David

    May 5, 2020 at 1:13 pm

    Thanks Neil

    Company A is Irish and registered in Ireland as a limited company as you have probably checked already. I am aware of the 1982 Act and this is why I brought Company A to the attention of the CAR.

    In order for Company A to sell their packages (tours), their clients must travel overseas, so given the wording of the Act (which we both agree is flawed and defunct), if Company A advertises or refers travel overseas, are they not breaking the law under the Act of 1982? So, for example, if they advertised and/or referred their client to another carrier or travel agent to complete the sale of travel by air, for financial gain in the form of a commission from that carrier / travel agent for issuing a ticket for air travel and used their financial facilities (credit card or bank transfer) or used their customer’s card to purchase travel overseas to meet their tours, would you consider they require a licence to trade?

    If not, then I or any John Doe can set up as an online travel agent in Ireland as a sole trader or a limited company and become an affiliate to any tour operator in the world and start selling tours for a commission without the need to apply for a licence. The only way for the online travel agent business to sell a tour is to check availability for travel overseas and inform the client, so then I am now advertising / referring my client to another company to purchase that part of the package, but let us say that I have an agreement with another travel agent / airline / carrier to be paid a commission for that referral or advertisement, is my business therefore in breach of the 1982 Act or do you feel that Company A is well within their rights to trade as they are doing now and potentially put travel agents out of business?

    As the Act states: “tour operator” or “travel agent” means a person other than a carrier who arranges for the purpose of selling or offering for sale to the public accommodation for travel by air, sea or land transport to destinations outside Ireland, or who holds himself out by advertising or otherwise as one who may make available such accommodation, either solely or in association with other accommodation, facilities or services”.

    The key wording I refer to is this section of the Act regarding Company A is “or who holds himself out by advertising or otherwise as one who may make available such accommodation, either solely or in association with other accommodation, facilities or services”.

    If they are advertising, promoting or referring their clients to travel overseas, especially if they are collecting a commission for their services (or not), then as far as I am concerned they need a licence or every travel agent / tour operator should look at doing the same by buying accommodation and tours overseas and letting the customer book their own travel. We all know this will not work, so do you honestly think it is working for Company A and that they have no involvement with the “advertising or otherwise” of travel outside of Ireland?

    Just a thought or an example as to the point I am trying to make with the CAR and for them to implement Transport (Tour Operators and Travel Agents) Act, 1982, Part II, Section 11 on Company A.

    I would not have gone to this much trouble if I did not believe that Company A are trading illegally and, if they are not, then the Transport (Tour Operators and Travel Agents) Act, 1982, needs to be ripped up!

    I know it is desperately trying times for the travel industry and consumers are putting hard-working travel agents under pressure, but the CAR have got it all so wrong, regardless of Covid-19 and when I made reference to Mr Dawson’s efforts and any travel agent who paid an airline with their company credit card on behalf of their clients and that any refund due from an airline is owned by that travel agent if they paid by their card and is therefore not the client’s refund is correct unless that travel agent states something different in their Booking Conditions, so the pressure is on travel agents to refund clients and I feel that many will unfortunately not be in a position to do this, so it again comes back to the protection for the consumer and I am sure this is something that the ITAA members and non-members should be vigilant of when completing transactions on their company credit cards on behalf of their clients. It also shows the severe gap between the CAR and its licence holders and the CAR are asking everyone to check with their credit card companies irrespective of that client being protected by a bond. Either there is not enough money to cover the bonds or the CAR are trying to offload customers to their credit card companies.

    As I mentioned earlier, my concern is with Company A for the reasons I stated and I have no qualms with travel agents, so I apologise if some of my comments referring to travel agent refunds feels like I am having a pop at travel agents, whereas in fact Company A is potentially doing damage to all Irish travel agents, including Mr Dawson’s ITAA members, and yet Company A is an affiliate of the ITAA.

    CAR response to me (a concerned consumer) what short of disrespectful to an issue I have regarding Company A, so if I (a consumer) can’t turn to the Regulator of the Travel Industry to express my concerns, then where does any consumer turn to?

    This is why I will reiterate, that CAR and the 1982 Act is flawed and the gap between licenced an unlicenced Travel Companies and who can trade within the travel industry is scary. I know licenced Travel Agents are Bonded and I for one use Travel Agents purely for this, but now Company A have damaged my trust and my belief in a flawed law that is so far behind the time and modern online travel, that unless consumers use Bonded Travel Agents, they’re on their own! CAR has a lot to answer for!

    As I said above, I wouldn’t have gone to this much trouble if I didn’t believe Company A are trading illegally and if they’re not, then the Transport (Tour Operators and Travel Agents) Act, 1982, needs to be ripped up!

    David.

    • Neil Steedman

      May 6, 2020 at 8:06 am

      Hi (again!) David. Thank you for your new comments. We appear to be at grave risk of repeating ourselves, so I will respond just one more time – and hopefully I will not confuse you even more!

      LEGISLATION: You refer to the Transport (Tour Operators and Travel Agents) Act, 1982. I refer you to the more recent Package Holidays and Travel Trade Act, 1995 and to the even more recent EU Directive 2015/2302 on Package Travel and Linked Travel Arrangements, to Ireland’s Statutory Instruments 80 and 105 introduced in March 2019 that gave effect to these arrangements, and to ITTN’s news story at: ittn.ie/news/car-publishes-updated-guidance-to-industry-on-directive-eu-2015-2302.

      COMPANY A: I can but repeat that Company A IS trading legally. This is a fact, not my belief. I also double-checked with the CAR, who confirmed, as I have previously said: “Companies which do not book flights on behalf of the consumer do not need a licence.”

      LICENCE RENEWALS: By the way, I also asked the CAR about 1st May 2020 licence renewals, and was advised: “In terms of the current licensing round, we are still in the process of issuing licences and will update our website in due course.” As I said earlier, in the current circumstances I consider this to be reasonable.

      REFUNDS AND LICENSING SYSTEM: You may be interested to know that Mike Gooley of UK company Trailfinders (which also has offices in Dublin, Cork and Limerick) recently tweeted (in relation to the UK Civil Aviation Authority): “It is beyond belief that the CAA has just renewed ATOLs for a raft of companies flouting the refund laws.” An Ireland-based online travel agency director has responded: “He is 100% correct. This antiquated system is not fit for purpose and now is the time to change it. If monies were held in a trust account, and left untouched until the booking was consumed, travel agents could draw-down for cancelled bookings and simply refund their valued clients pronto and would not find themselves in a mess they did not create.”

      Best wishes. Over and out! Neil.

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NEIL STEEDMAN has been a trade journalist, copywriter, editor and proofreader for 52 years, and News & Features Editor for ‘Irish Travel Trade News’ for the past 42 years.

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