Customers with cancelled holidays will face lengthy delays in getting money back if travel firms are forced into bankruptcy.
France, Belgium, Denmark, Italy have all introduced changes to EU rules but UK government drags its feet.
Following a lack of action by Government officials, ABTA has again written to Government Ministers, including the office of the Prime Minister, to urge immediate action to prevent catastrophic damage to the UK travel industry, and widespread consumer detriment.
ABTA Chief Executive Mark Tanzer 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.”
ABTA is asking the Government to recognise the unprecedented nature of the situation and proposes 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.
ABTA has called on the Government to take strong enforcement action against airlines who flout the law by withholding refunds due following the cancellation of flights.
ABTA has also shared feedback from its Members on implementation challenges with the measures that the Government has already announced to help businesses though the crisis such as the approval process for Coronavirus Business Interruption Loans and scope of the Coronavirus Job Retention Scheme.