Across the world, the travel industry has been smacked with devastating effects as the world goes into an unprecedented lockdown in a bid to tackle the coronavirus pandemic. From airlines to travel agents, business has been put on hold and staff in the UK furloughed in their masses.
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However, concerns for the future of the industry has been heightened by the UK government’s decision to implement an “indefinite” travel advisory.
The Foreign and Commonwealth Office is now advising against all but essential travel indefinitely, forcing airlines and holiday firms to push cancellations much further in the future than initially planned.
Already holiday firm TUI has cancelled all beach holidays up to and including May 14 and all Marella Cruise holidays up to and including May 31. It has additionally put its River Cruises, due to launch last month, on hold until November.
Meanwhile, Jet2 announced this morning it would be cancelling all flight and holidays until mid-June.
Similarly, easyJet has grounded its flights until further notice and British Airways is urging passengers to continuously check their flight status as changes could come at any time.
However, all of this uncertainty is causing holidaymakers to rethink their plans, and leaving travel businesses facing potentially destructive financial losses which could see them disappear from the industry altogether.
ABTA has warned that if airlines and other businesses are forced to cash out refunds to all of their would-be customers they may be left in a dire state.
The travel trade association is calling on the UK government to rethink the current refund rules to allow companies to dish out credit notes as a “short-term alternative” to cash refunds.
At present, under EU law, travel firms must refund customers within 14 days if their holiday is cancelled.
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However, given the vast number of cancellations, many travel firms face bankruptcy if they are to payout immediately.
ABTA has additionally warned that should travel firms collapse, taxpayers may be left footing a bill of up to £4.5 billion to refund customers.
A suggestion has been made to allow companies to issue credit notes which could be used for future travel plans, or for a cash refund in the future once companies are in better shape.
Similar measures have already been put in place in France, Italy, Belgium, Spain, Germany, the Netherlands, and Denmark.
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Mark Tanzer, ABTA chief executive, said: “We know the government has a lot to manage with the current crisis, but its failure to make these temporary changes to refund rules defies logic and is leaving the consumer in no-man’s land.
“The rules around 14-day refunds were never designed for the mass cancellation of holidays, which we’re now seeing as result of government measures to contain the pandemic.
“It’s in nobody’s interests for normally healthy, viable businesses to be pushed into bankruptcy.
“Hundreds of thousands of jobs are at risk and the UK taxpayer will have to foot the bill for customer refunds if there is an industry-wide collapse of travel businesses.
“It’s important to reiterate, this is about supporting businesses through an entirely unforeseeable and short-term cashflow crunch — customers will not lose their right to a refund, and their money is not at risk.”
So how can Britons help save the travel industry and ensure it rises to its former glory once the pandemic has been beaten?
Money Saving Expert Martin Lewis says a lot of it has to do with thinking “ethically and morally” before pursuing monetary refunds.
He said this applies to hotels, as well as other travel-related bookings and events.
Those who would not find themselves in a “financial bind” by accepting vouchers over a refund are encouraged to do so.
Mr Lewis explains: “I would say in this day and age we are trying to keep as many companies surviving as we can.
“If you can take the voucher and that wouldn’t compromise you and your finances taking that voucher form this company may just be what keeps this company going and keeps its staff in a job.
“So I’m not telling anybody to do that, I’m saying we must all look at our own personal, ethics, morality and situation which is very important to decide how hard we are going to push in these unprecedented times.”
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