A lack of government support for travel risks “catastrophic damage” to the sector, Abta chief executive Mark Tanzer has warned.
In a letter to prime minister Boris Johnson and various ministers, Tanzer has reiterated the association’s call for action on suspending the provisions of the Package Travel Regulations (PTRs).
Businesses are currently required to provide a refund for cancelled holidays within 14 days, despite a move by the European Commission (EC) to permit firms to offer credit notes in lieu of an immediate refund.
However, this provision hasn’t yet been made UK law, even though the UK is still abiding by the EU regulations during the Brexit transition period through to the end of the year.
Tanzer said customers with cancelled holidays will face lengthy delays getting their money back if travel firms collapse in the interim due to cash flow issues.
He further stressed many European nations had already made the necessary changes, as per the EC’s concession, to help their travel sectors survive.
The letter, outlined on Monday (30 March), warns that beside the “catastrophic damage” to the sector itself, the government’ failure to act risks widespread harm to consumer sentiment.
“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,” said Tanzer.
“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.”
Tanzer said the PTRs in their current form were “entirely unsuited” to deal with the pandemic. “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,” said Tanzer.
“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.”
Abta has once again set out its key demands of government and the temporary amendments it seeks to the PTRs. These include: extending the 14-day refund window to four months; confirming refund credits will be protected; and the creation of an government-backed emergency hardship fund to fulfil refund payments where suppliers, such as hotels or airlines, cannot or will not refund tour operators.
Moreover, Abta is demanding the government takes “strong enforcement action” against airlines “flouting the law” by withholding refunds owing to the cancellation of flights.