ABTA has warned that customers with with cancelled holidays will face lengthy delays in getting money back if travel firms are forced into bankruptcy. The association has urged the government act now, with governments in France, Belgium, Denmark and Italy having all introduced changes to EU rules.
ABTA has written to the prime minister as well as other ministers urging immediate action to avoid damage to the UK travel industry.
Mark Tanzer, ABTA chief executive, said: “The global pandemic has put enormous financial strain on tour operators and travel agents, with businesses seeing a collapse in sales while facing immediate repatriation costs and refund demands for cancelled holidays on a scale that is unmanageable in the short term.
“These businesses are themselves waiting for refunds from hotels and airlines and without this money, they simply do not have the cash to provide refunds to customers within 14 days.
“Existing regulations are entirely unsuited to deal with this situation. We want to avoid the scenario of normally successful travel businesses employing tens of thousands of people facing bankruptcy, resulting in holidaymakers having to wait many months for refunds through Government financial protection schemes.
“We are proposing some simple, temporary changes to regulations to buy more time for companies to keep trading, while ensuring customer rights are protected. Many European countries, including France, Belgium, Denmark and Italy, have already announced similar regulatory changes to preserve their travel industries and protect customers.”
In a statement from ABTA the company proposed the following temporary amendments to the Package Travel Regulations:
- That the 14-day window for refund payments should be extended to a 4-month period.
- That Government should confirm the ongoing protection of refund credits.
- That where suppliers (e.g. hotels or airlines) cannot or will not refund tour operators, there should be an emergency government consumer hardship fund to help fulfil refund payments.