ABTA is writing to the Prime Minister again to urge him to take immediate action to prevent the collapse of UK travel companies that will result in tens of thousands of job losses, add significant delays to customer refunds and lead to long-term damage to the UK holiday market.
The UK Government has announced measures to support airlines and airports but they have not acted on urgent calls from tour operators and travel agents who at the same time as seeing their bookings wiped out are faced with having to refund thousands of customers for cancelled holidays, as a result of the coronavirus outbreak.
Chief Executive Mark Tanzer said: “We’re running out of time, people are losing their jobs right now and some companies will be facing bankruptcy if nothing is done. If that happens on a significant scale then the financial protection schemes for holidays will be placed under immense pressure and there will be considerable delays in customers recovering their money. The Government has said they will do ‘whatever it takes’ but we need much quicker and more decisive action.”
TUI, Hays Travel and Kuoni are among the companies to have laid off staff, cut wages or introduced shorter working hours to try to cut their costs during the crisis. Travel Counsellors announced this afternoon that it has entered into a consultation period with its staff.
“Following the changes in FCO advice in recent weeks, culminating in a complete travel advisory ban announced this week, thousands of customers are entitled to refunds for their cancelled holidays,” said ABTA.
“However, most travel businesses have not received money back from their suppliers and many are unable to pay cash refunds immediately. The travel industry is urgently seeking Government backing for a number of measures to relax the regulations to ensure customer’s money is protected, while giving travel businesses more refund options.
“The industry is also calling for immediate cash injections to business, either as direct Government support for salaries or as underwritten loans, or both.”
The European Commission this week relaxed its guidance around the Package Travel Regulations, encouraging customers to accept credit notes that are financially protected, and other European countries are following this lead and changing their regulations. ABTA is asking PM Boris Johnson to take immediate action to:
- implement a mechanism through which direct funding to maintain employment can be channelled to employers
- enable the provision of Government underwritten loans to businesses of all sizes, with the access mechanisms for these loans made clear, and allow immediate deferment of tax for six months
- temporarily suspend Air Passenger Duty
It is also asking for temporary changes to the Package Travel Regulations to remove the financial burden of refunding passengers.
“While we are not seeking to remove the consumer’s right to a refund, we believe that consumers will not see their money any quicker by enforcement of the current regulations,” it said. It is asking for the following changes:
- companies should be allowed to issue refund credit instead of cash; the credits would be protected by the company’ ATOL
- operators should be given four months to refund, instead of 14 days
- operators should not be responsible for providing refunds if these costs are not covered by the suppliers. Where those suppliers cannot or will not refund, there needs to be an emergency Government consumer hardship fund to fulfil refund payments
