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More than half of travel SMBs still paying out more refunds than revenue

The Australian Small Business and Family Enterprise Ombudsman Kate Carnell has called for an urgent response from the Federal Government regarding a critical support package for travel agents who have been decimated by the COVID crisis.

Ms Carnell says close to 1,300 distressed travel agents completed ASBFEO’s online survey last month and have been clinging by a thread as they wait to hear if there will be a lifeline announced by the federal government.

“These travel agents, most of whom are small businesses, need help now,” Ms Carnell says.

“Our survey showed that the situation is dire for these travel agents – 98% of which told us their revenue has plunged by more than 75% since COVID restrictions were introduced in March.

“More than half told us their revenue is down by over 100% meaning they have been paying out more in refunds, including previously made revenue, than they are selling in new business.

“It’s clear these small businesses are in a world of pain and a support package should be announced as a matter of urgency.

“We know travel agents are working hard to negotiate refunds from travel companies and airlines for their customers. In fact 56% of these small businesses said they would have already closed down, if not for their commitment to ensure customers were reimbursed for the holidays they could no longer take.

“Travel agents have been faced with enormous challenges to get back the deposits paid to travel providers such as offshore cruise ship or tour companies on behalf of their customers. A number of travel agents have complained about Qantas specifically, in terms of the length of time it is taking to refund customers.

“If these small business owners were to walk away now, customers would be unlikely to get a refund. That said, travel agents are losing money by keeping their businesses open as they try to do the right thing for their customers.

“With international travel restrictions likely to remain in place for the foreseeable future, this is an incredibly difficult situation for small businesses in the tourism sector, but travel agents are among the hardest hit and they will need targeted support to continue the important work they are doing.”

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