Travel industry is braced for more collapses

BRITAIN'S package holiday business is bracing itself for a damaging spate of tour operator failures after the collapse of two more companies at the weekend.

Both companies - the Carlisle- based coach operator Impact Holidays and London-based DHG (UK) Ltd - were bonded. Unlike the customers of unbonded Land Travel, which collapsed in July, all holidaymakers will receive full refunds.

The travel trade has been particularly alarmed by the failure of DHG (UK) Ltd, parent group of the well-respected operator Turkish Delight, in the top 30 of package holiday companies, which was licensed this year by the CAA (Civil Aviation Authority) to carry 56,000 travellers.

DHG had 3,000 customers abroad when it ceased trading, and had forward bookings for a further 9,000. It seems unlikely that its bond of pounds 1.2m will be sufficient to cover the cost of refunds.

The CAA said that it is 'probable' additional funds will have to be taken from the Air Travel Trust Fund, now standing at pounds 5m. The Government announced earlier this year that a levy would be charged on all package holidays to rebuild the fund, but no further details have been revealed.

Turkish Delight had been in business since 1985, and was one of the first companies to specialise solely in Turkey. It had been particularly active in conservation. Its collapse highlights the vulnerability of small, specialist operators in the current price war between major companies.

DHG had been a leading member of Aito (Association of Independent Tour Operators) whose chairman Noel Josephides said of the collapse: 'Unfortunately, now the good guys are being forced out of the business.'

There are widespread rumours in the industry that further collapses are imminent. With operators now having to settle bills for end-of-season flying with charter airlines, cash flow is being stretched to breaking point. Nor have operators been helped by lower than expected bookings for winter holidays.

Industry observers believe that the package holiday industry has yet to feel the full effects of the present recession. It has benefited from what is described as the 'sod-it' factor - that despite all their financial troubles people book a holiday no matter what. But there are fears that the bankruptcy toll among holiday companies will mount rapidly next year as the 'sod-it' factor evaporates.

With no end to the recession in sight, and the possibiity of a devaluation of the pound against other European currencies - which would make travel to the Continent more expensive - tour operators are fastening their seat belts for a very bumpy ride this month.

Too many tour companies send solo holidaymakers to 'Colditz'-style rooms and then make a profit out of the supplements charged to single people, the Consumers' Association says today. Holiday Which? quotes examples of single travellers paying pounds 11.50 extra per night to stay at a hotel in Cyprus with Airtours, or pounds 8.50 with Falcon, but just pounds 5.36 if they book directly'. It demands a better deal for solo tourists and an end to the 'discrimination' they suffer in favour of couples.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Tradewind Recruitment: Phase Co-ordinator for Foundation and Key Stage 1

Negotiable: Tradewind Recruitment: Phase Co-ordinator for Foundation and Key S...

Tradewind Recruitment: SEN Teacher

Negotiable: Tradewind Recruitment: SEN Teacher We have a fantastic special n...

Tradewind Recruitment: History Teacher

Negotiable: Tradewind Recruitment: My client is an 11-18 all ability co-educat...

Tradewind Recruitment: Year 6 Teacher

£100 - £150 per day: Tradewind Recruitment: Year 6 Teacher Birmingham Jan 2015...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee