Under the EU Travel Package Directive, people who have had to cancel bookings due Covid-19 travel restrictions are entitled to a cash refund, and that entitlement will continue to apply. However, it is also the case that many travel agents and tour operators are having severe cash flow problems, and it is not clear that all of them will be able to meet all of their current cash refund obligations and at the same time be able to stay in business. The Government has therefore agreed to back a new refund credit note that travel agents and tour operators can offer their customers.

The refund credit note will work as follows:

1.   It can be to the value of all of the refund due or part of the refund alongside part cash.

2.   It will be issued with a future redeemable date, and on that date it can be exchanged for its cash value, or can be used to book a replacement holiday.

3.   It will be State-guaranteed in the event that the travel agent or tour operator becomes insolvent.