Turkey’s tourism industry is facing refunds on nearly one million package deal sales that were completed before the announcement of the first COVID-19 patient in Turkey, Deutsche Welle reported April 19.
Turkey’s tourism industry has been working on an “early-reservation” package-deal option over the past decade, in which tourism agencies will sell packages to customers months ahead of the summer for prices lower than the market average.
Agencies will then buy plane tickets, make hotel reservations and book restaurants ahead of time, pocketing the difference in prices as a benefit.
The industry had sold nearly one million of said packages prior to March 11, when the COVID-19 pandemic arrived in Turkey.
Agencies were faced with roughly one million clients who wanted refunds on the package-deal vacations that they could no longer go on.
Even if agencies were able to pay back every customer, they were not receiving refunds for the services they had booked for their clients, thus having to pay the refunds out of pocket.
‘Either the hotels or the airlines have the money’
Online vacation booking website tatilsepeti.com (“vacation basket” in Turkish) sold 750,000 vacation packages in 2019, almost half of which were booked during “early reservations” periods, CEO Koray Küçükyılmaz said.
Agencies pay almost all hotel and airline costs during these early reservation periods, Küçükyılmaz noted.
“Agencies are only a mediator between the client and the hotel. When an agency makes a sale, they don’t get to keep the money. They pay the airline, the hotel…”
Now, agencies are stuck in limbo between clients who want refunds, and airlines and hotels who refuse to refund the agencies.
“The client wants their money back. You need to have the money for that, but either the hotels or the airlines have the money…”
Turkey’s airlines are currently sanctioned by a regulation that allows them to start paying refunds when flights start back up, and mandates them to pay within 60 days of the start of operations.
Tatilsepeti offers customers insurance that will refund them up to 72 hours before a trip, Küçükyılmaz said.
However, the COVID-19 pandemic is considered a “compelling reason,” allowing insurance companies to break contract without consequence.
2.5 million liras in refunds
International travel agency Gazella Tourism made 2,500,000 Turkish Liras worth of refunds, Board Chairman Velit Gazel said.
“However, we are a relatively small firm. There’s simply no way for bigger companies to pay hundreds of millions of lira at once.”
The COVID-19 outbreak started right when the tourism season would have begun in Turkey, Association of Turkish Travel Agencies (TURSAB) Chair Firuz Bağlıkaya noted.
“Around now is when we would have charter flights starting. All stakeholders are going through really hard times,” Bağlıkaya said.
Bağlıkaya said that TURSAB would prefer a legal regulation over financial support from the government.
“Travel agencies should be included in the regulation that airlines are under,” Bağlıkaya said, noting that this regulation would not financially strain the government.
TURSAB will not be collecting membership fees from travel agencies, which will cost the association some 35 million liras, Bağlıkaya added.
While industry representatives are waiting to hear from the Trade Ministry for a legal solution, travel agencies are not included in the judicial reform package currently in parliament.