Updated at 8.30pm with travel agents' federation comments

Travel agents are struggling to keep up with claims from those who had booked package holidays which had to be cancelled due to the coronavirus outbreak.

The cancellations led customers to expect immediate refunds from tour operators, but the matter is complicated.

One prospective traveller told Times of Malta he had spent almost €2,000 on a tour to Spain over the Easter period but was informed last week that the tour was being cancelled due to the coronavirus outbreak. He said he had been chasing the tour operator for several days but to no avail.

He recently discovered that the government had introduced a legal notice which extended from 14 days to six months the time window that travel agents have to reimburse people.

But travel agents are facing their fair share of struggles, with a number of them explaining the dilemma. Contrary to popular belief, the money that clients would have paid upon booking was “not sitting in our drawers”.

The funds would have been passed on to airlines, hotels, and ground handlers several months in advance so as to guarantee the package price offered to clients.

“As per normal practice, last-minute cancellations are always non-refundable, so what we have been doing since the outbreak is negotiate with all partners so that if they do not want to refund the money, at least they give us the possibility to postpone and allow our clients to travel at a later date,” one particular travel agent said.

Many travel agents were finding difficulties with suppliers, including hotels in destinations where COVID-19 was more or less contained and who are insisting that their hotel remained operational.

They said the legal notice issued by the government gave travel agents a breather because they were employers too and had wages to pay when business is at a standstill.

The Directive on Package Travel Regulations was never intended for situations like the current one when all major airports are closing down, countries are closing their borders and people are asked to stay home under lockdown.

Following a European Commission decision, the directive on Package Travel Regulations was relaxed as was done for the airline industry.

This will give customers assurance that they will get a holiday at a later stage, while providing a much-needed helping hand to travel companies through these difficult and unprecedented times,” the travel agent added.

Travel Agents' federation appeals for patience

Iain Tonna, the president of the travel agents' federation (FATTA) said these were difficult times for everyone, including travel agents, and appealed for prospective travellers to be patient. 

"The consumers' funds are well protected by the Package Travel and Linked Travel Arrangements Regulations. These are difficult times for all of us, travel agents, so we appeal for patience, understanding and compassion as we navigate through this period with our mutual interests in mind," he told Times of Malta. 

He said it was FATTA's request to the government to extend the deadline by which to refund. This extended period was not only intended to give agents a grace period during which to try to retrieve the funds from the suppliers before actually refunding, but also to protect employees and the consumers themselves. 

"As you can imagine, travel agents' revenue has been reduced to zero so a rush of refund claims being paid out in a short period of time would put tremendous strain on agents' liquidity at a time when they still have to pay employees. The request for such an extension was in line with a statement by the European Commission recommending that member states introduce some flexibility and to encourage consumers to consider postponing their trips rather than cancelling them.

Many other EU and EEA states including Italy, Belgium, France Netherlands and the UK have already implemented the Commission's recommendations with much more flexibility than Malta, Tonna said.