The government of New Zealand has announced that it will pay travel agencies 7.5% of all refunds and 5% of credits successfully secured on behalf of consumers to help the travel and tourism sector and support New Zealanders in getting back the money they are owed from cancelled overseas travel plans caused by the pandemic.

New Zealand’s Ministry of Business, Innovation and Employment (MBIE) said that travel agents and wholesalers can make applications to the Consumer Travel Reimbursement Scheme – designed to incentivise travel agents to recoup these funds for consumers starting 20 October.

Refunds and credits for cancelled travel will be secured by travel businesses on behalf of their customers, who will pass refunds and credits to their customers in full. The travel businesses can then claim a percentage of the refund or credit through the scheme.

As per the estimates of the travel sector and MBIE, around NZD 690 million (USD 455 million) of New Zealanders’ money is locked up from cancelled travel plans due to Covid-19, with approximately 85% related to international travel.

The scheme is funded to a maximum of NZD 47.2 million (USD 31.12 million) and will pay New Zealand-based travel agents 7.5% of the value of all cash refunds they are able to successfully recover for their customers and 5% of the value of all credits successfully secured or rebooked for international travel.

James Hartley, general manager of commerce, consumers and communications and MBIE’s spokesperson said: “The Consumer Travel Reimbursement Scheme has been put in place to play an important role in helping Kiwi customers get their money back, while at the same time providing the travel industry with the confidence and financial support to facilitate the recovery of funds held overseas.”

Securing refunds will enable New Zealanders to support the local economy through domestic tourism, he added.

While MBIE is working with the Travel Agents’ Association of New Zealand and some prominent agencies, who will apply on behalf of their members, franchisees and affiliates, the scheme is also open to independent travel businesses based within New Zealand, who can apply directly through MBIE.