Gill’s Cruise Centre goes bust: what are the consequences?

Tens of thousands of holidaymakers who have booked with a wide range of cruise lines have learned that their travel agent has gone out of business.

Gill’s Cruise Centre, based in Cardiff, suspended sales on Thursday and on Friday was ejected from Abta, the travel association. These questions aim to explain what it means for you, whether you’re a holidaymaker booked with Gill’s – or simply worried about what it might mean for the travel industry.

Q. What went wrong?

Basically, in the ultra-competitive cruise market, Gill’s was selling at a loss. The firm was a familiar name in the newspaper travel sections, taking out big ads and promising better prices than rival agencies. While cruise lines were paying commission of 15 per cent or more, the business model seemed to be working. But earlier this year Britain’s biggest cruise firm, Carnival – which owns P&O and Cunard – cut its commission to just 5 per cent. Offering deep discounts and still making money evidently didn’t add up, and late on Friday 15 July, Abta said it regarded Gill’s as a financial failure.

Q. I’ve booked with Gill’s. What happens to my holiday?

You should be able to take the cruise as normal. Compared with some of the travel firm failures we saw last year, the damage should be limited. Certainly there’s no risk of anyone being stranded abroad. The cruise lines say that they will honour bookings, and are contacting people who had booked with Gill’s to establish what they had paid and when. The result should be that almost everybody gets the cruise they booked at the price they’d agreed, even if that was below cost due to the discounting strategy of Gill’s. The cruise lines are contacting passengers roughly in the order in which they are due to depart, to explain the situation and reassure customers.

Q. As well as the cruise, I booked a hotel the night before in Southampton, and a rental car for the day in Lanzarote.

You are one of the few people who may lose out financially. These arrangements are outside the scope of Gill’s bonding, and it is down to you to talk to the suppliers – ie the hotel and the car-rental company – about your bookings. If they have been paid by Gill’s, everything should proceed as planned. If they haven’t, you need to discuss with them how they might be able to help you.

Q. Are other holiday companies – cruise or otherwise - likely to find themselves in trouble?

Earlier in the week Thomas Cook – Britain’s second-biggest holiday company – saw its value fall by one-third after it issued a profit warning, blaming the weakness of the UK market. The story of this summer seems to be: people are booking late and demanding bargains, which is good news for them but bad for the travel industry. Thomas Cook and the other established package-holiday companies are looking robust, but the same problems as last year could affect operators offering very cheap holidays to destinations such as Turkey – one company (which I won’t name) is offering a week in Turkey departing next weekend for the big getaway - for around £300, including flights, accommodation and breakfast, which is way below what holiday companies would want to be earning during the school summer holidays.

Q. What can you do to protect yourself?

Make sure if you’re booking a package holiday that it IS a package holiday, covered by an ATOL. And, if you’re booking a cruise, make sure that the agent you book through is fully bonded.