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Abta calls on government to cover consumer refund payments
Abta believes “normally successful” travel businesses are at risk of collapsing if the government does not step in urgently.
The association is seeking short-term support for the industry, without which it says “perfectly viable and normally successful UK travel businesses employing tens of thousands of people are at risk of going bankrupt”.
Travel businesses are working around the clock to manage arrangements for customers in-destination, including repatriation, and have been trying to provide alternative arrangements for those with imminent departures, but this is becoming increasingly difficult as the virus spreads, Abta said.
Travel agents and tour operators are also facing a huge drop in bookings.
Because of the unique circumstances of the coronavirus pandemic, Abta is calling for temporary changes to the UK Package Travel Regulations at European and UK government level, with immediate effect.
Abta says the existing financial protection structures and regulations were not designed to cope with a large-scale collapse of businesses.
Abta's demands to government
• That tour operators should not be responsible for providing refunds if these costs are not covered by the suppliers (e.g., the hotel or airline). Where those suppliers cannot or will not refund, there needs to be an emergency government consumer hardship fund to fulfil refund payments.
• That the 14-day window in the regulations for refund payments should be removed.
• That refund credits should be allowed as an acceptable alternative to cash refunds, with all protections carried forward as part of the refund credit.
Additional calls
Urgent action to enable the provision to all sizes of business of loans that the Chancellor and Bank of England announced last week with the access mechanisms for these loans made clear.
• A suspension of Air Passenger Duty, the saving of which to be passed onto the consumer to help the sector to recover at the earliest opportunity.
• Immediate deferment of HMRC payments for a period of six months in order to support cash flow.
Next steps
Abta has been in direct contact throughout the crisis with senior government ministers and has today written again to the prime minster and the secretary of state at the department for Business, Energy and Industrial Strategy (BEIS).
Mark Tanzer, Abta’s chief executive, said: “The evolving coronavirus situation is causing immense damage to UK travel businesses.
“I am calling for urgent action today by the government to make money available to travel and tourism companies and to make temporary changes to existing package travel regulation.
“Without this action, we risk healthy travel businesses going bankrupt, thousands of job losses across the country and customers losing money.”
Jennifer Morris
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