UK travel industry urges government action to forestall collapse of businesses

The UK travel sector is calling on the government to make immediate changes to the package travel regulations to prevent “innumerable company collapses and the loss of many thousands of jobs”.

Under the existing regulations tour operators are obliged to offer a full refund if elements of the holiday can’t be provided. But travel industry bodies say that in the current global crisis the regulations are not fit for purpose and will lead to the end of many otherwise successful travel businesses.

“The existing financial protection structures and regulations were not designed to cope with a large-scale collapse of businesses,” said Mark Tanzer, chief executive of the Association of British Travel Agents (Abta).

Abta is asking for an emergency government consumer hardship fund to fulfil refund payments; and is also requesting that credits should be allowed as an alternative to cash refunds. In addition it is calling for the current 14-day window for refund payments to be removed.

The Association of Independent Tour Operators (Aito) reiterated Abta’s assertion that the package travel regulations must be changed with immediate effect because “they were not designed to cope with a disaster affecting every country and every destination worldwide.”

“The existing financial protection structures and regulations were not designed to cope with a large-scale collapse of businesses”

To continue with the regulations “would lead to innumerable company collapses and the loss of many thousands of jobs, which would cost the government dear for many decades to come.”

As well as calling for government intervention over the PTRs, travel businesses are pleading with holidaymakers to help by being patient and postponing rather than cancelling trips. “Travel companies are doing everything they can to offer flexible booking policies. It is really frustrating [for customers] if you don’t know where you stand in terms of your trip but companies are inundated at the moment so trying to have patience [will help]. The best advice is to speak to your travel company and get a credit or change to an alternative date,” said an Abta spokesperson.

Julia Lo Bue-Said, chief executive of Advantage Travel Partnership, which represents 350 small and medium-sized travel agents, said the industry was at breaking point while working round the clock to help customers. She said Advantage group members were looking at bookings by date order. “If you don’t have an imminent departure the best advice is to wait and see.”

Lo Bue-Said welcomed the chancellor’s announcement of a £330bn emergency package for businesses on 17 March but said it was unclear how it would be split between various sectors such as hospitality, retail and leisure, adding: “Speed is of the essence. Nothing is materialising quick enough; [financial support] doesn’t seem to be filtering down. The situation is really dire. For small businesses this is going to be catastrophic. We will get through this but what the industry looks like at the end is impossible to say.”

Her call for immediate action has been echoed across the sector. Following the news of the stimulus package, Abta said measures such as government-backed loans should be made available immediately to travel businesses, with clear guidelines on how businesses can access them.

The chancellor’s promise that the government would do “whatever it takes” came just hours after warnings that the global tourism sector was fighting for survival. In an open letter published on 17 March, the World Travel and Tourism Council said: “The travel and tourism sector is uniquely exposed, and we estimate 50 million jobs globally are at risk. It is calling for immediate financial assistance to protect the incomes of millions of people who work in travel and tourism; unlimited, interest-free loans for travel companies; and all taxes and other dues to be waived for the next 12 months.” Without these interventions, the WTTC said, economies around the world faced “an existential threat.”

Signed by WTTC president Gloria Guevara, the letter “implores” governments to take drastic action to protect the sector, which is responsible for creating one in five new jobs.

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