Inside travel: Tour operators

Can you guarantee your holiday? Simon Calder lays down the laws of probability – and protection

 

Why do so many holiday companies go bust?

First, not many do; the Holidays 4U collapse is the biggest of the year (so far), yet its 50,000 customers represent only about one quarter of one per cent of Britain's total mainstream holiday business.

Next, the travel industry is based on optimism. People stump up cash in the expectation of a well-deserved holiday, and almost always get it. On the other side of the bargain, travel companies expect that they will attract enough customers at the right prices to make a profit. So they sign contracts with accommodation providers and airlines. Sometimes, their optimism is misplaced. Like other companies before it, Holidays 4U it was unable to take in enough money to pay the bills from its suppliers.

How can I be sure my money is safe?

In the narrow sense of getting a refund if the holiday company fails, it's easy. Book a package holiday covered by an Air Travel Organiser's Licence (Atol), for which you pay a £2.50 "Atol Protection Contribution". Then, if your tour operator follows XL, Goldtrail, Holidays 4U and many others into financial oblivion, you can join the long queue of people who are guaranteed a refund from the Civil Aviation Authority, which administers the Atol scheme. Call the organisation on 0844 4933 037, or visit atol.org.uk.

However, the process will take months rather than weeks, and if you scrabble around to find an alternative holiday, you can be fairly sure that the cost will have increased. There is plenty of capacity around this summer, which is one symptom of the problems in the industry. But when a substantial collapse takes place, other holiday companies take advantage of the subsequent spike in demand to raise prices.

If you buy flights and accommodation separately, and your flight tickets turn out to be worthless, the accommodation provider is not obliged to repay you.

Financial certainty is one thing, but how can I ensure I get the holiday I booked?

Look at the recent history of big collapses: Holidays 4U, Goldtrail and XL. All focused on low-budget holidays to the eastern Mediterranean. Their final days were characterised by massive discounting in a bid to drag in cash to pay bills – not a sustainable strategy. If you seek a cheap last-minute holiday to Turkey or Greece, you might opt to travel with a large tour operator such as Thomson, Thomas Cook or Monarch. Of course, there are plenty of smaller, reputable operators who are also in good shape, and personal recommendation remains valuable.

It's worth paying a bit more to book through a travel agent. A good agent is well tuned to the market, and can detect danger signals that may indicate trouble at a particular tour operator. These include being slow with refunds, demanding payment for future bookings with increasing urgency, or cutting prices to plainly unprofitable levels in a bid to raise cash. The agent may stop selling that operator's product, or at least warn you of the risk.

If my travel company goes bust, won't my travel insurance cover me for any losses?

I don't know, because I haven't read your policy. If, like me, you have bought cheap annual insurance to cover you mainly in the event of medical emergencies, the answer is probably "no". Some policies cover "supplier failure", but many don't. Similarly, there is no consistency about the response to volcanic ash, snow at Heathrow or striking air-traffic controllers. All the more reason for booking a proper package, where the tour operator is responsible for sorting out any logistical problems.

If my holiday company goes bust while I'm abroad, what should I do?

Stay by the pool and order another drink, so long as you are on an Atol-protected package holiday. The Civil Aviation Authority will organise "rescue" flights, with most passengers arriving back at the right airports at approximately the right times. You should not have to pay again for the hotel; if you do, send a claim to the CAA when you get home.

Life and Style
Social media users in Mexico who commented on cartel violence have been killed in the past
techTweets not showing up or loading this morning, users say
Sport
premier leagueLive: All the latest news and scores from today's matches
News
newsMcKamey Manor says 'there is no escape until the tour is completed'
News
politics
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
Travel
ebookHow to enjoy the perfect short break in 20 great cities
Sport
Fans of Dulwich Hamlet FC at their ground Champion Hill
footballFans are rejecting the £2,000 season tickets, officious stewarding, and airline-stadium sponsorship
News
Shami Chakrabarti
people
Arts and Entertainment
Benedict Cumberbatch has refused to deny his involvement in the upcoming new Star Wars film
filmBenedict Cumberbatch reignites Star Wars 7 rumours
Sport
football
News
news
Independent Travel Videos
Independent Travel Videos
Simon Calder in Amsterdam
Independent Travel Videos
Simon Calder in Giverny
Independent Travel Videos
Simon Calder in St John's
Independent Travel Videos
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.

ES Rentals

    iJobs Job Widget
    iJobs Travel

    Junior Application Support Engineer (ERP / SSRS)

    £23000 - £30000 per annum + pension, 25days holiday: Ashdown Group: An industr...

    IT Systems Analyst / Application Support Engineer (ERP / SSRS)

    £23000 - £30000 per annum + pension, 25days holiday: Ashdown Group: An industr...

    SCRUM Master

    £30 - 50k (DOE) + Benefits: Guru Careers: We are seeking a SCRUM Master to joi...

    Franchise Support Assistant

    £13,520: Recruitment Genius: As this role can be customer facing at times, the...

    Day In a Page

    Wilko Johnson, now the bad news: musician splits with manager after police investigate assault claims

    Wilko Johnson, now the bad news

    Former Dr Feelgood splits with manager after police investigate assault claims
    Mark Udall: The Democrat Senator with a fight on his hands ahead of the US midterm elections

    Mark Udall: The Democrat Senator with a fight on his hands

    The Senator for Colorado is for gay rights, for abortion rights – and in the Republicans’ sights as they threaten to take control of the Senate next month
    New discoveries show more contact between far-flung prehistoric humans than had been thought

    New discoveries show more contact between far-flung prehistoric humans than had been thought

    Evidence found of contact between Easter Islanders and South America
    Cerys Matthews reveals how her uncle taped 150 interviews for a biography of Dylan Thomas

    Cerys Matthews on Dylan Thomas

    The singer reveals how her uncle taped 150 interviews for a biography of the famous Welsh poet
    DIY is not fun and we've finally realised this as a nation

    Homebase closures: 'DIY is not fun'

    Homebase has announced the closure of one in four of its stores. Nick Harding, who never did know his awl from his elbow, is glad to see the back of DIY
    The Battle of the Five Armies: Air New Zealand releases new Hobbit-inspired in-flight video

    Air New Zealand's wizard in-flight video

    The airline has released a new Hobbit-inspired clip dubbed "The most epic safety video ever made"
    Pumpkin spice is the flavour of the month - but can you stomach the sweetness?

    Pumpkin spice is the flavour of the month

    The combination of cinnamon, clove, nutmeg (and no actual pumpkin), now flavours everything from lattes to cream cheese in the US
    11 best sonic skincare brushes

    11 best sonic skincare brushes

    Forget the flannel - take skincare to the next level by using your favourite cleanser with a sonic facial brush
    Paul Scholes column: I'm not worried about Manchester United's defence - Chelsea test can be the making of Phil Jones and Marcos Rojo

    Paul Scholes column

    I'm not worried about Manchester United's defence - Chelsea test can be the making of Jones and Rojo
    Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

    Frank Warren: Boxing has its problems but in all my time I've never seen a crooked fight

    While other sports are stalked by corruption, we are an easy target for the critics
    Jamie Roberts exclusive interview: 'I'm a man of my word – I'll stay in Paris'

    Jamie Roberts: 'I'm a man of my word – I'll stay in Paris'

    Wales centre says he’s not coming home but is looking to establish himself at Racing Métro
    How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?

    A crime that reveals London's dark heart

    How could three tourists have been battered within an inch of their lives by a burglar in a plush London hotel?
    Meet 'Porridge' and 'Vampire': Chinese state TV is offering advice for citizens picking a Western moniker

    Lost in translation: Western monikers

    Chinese state TV is offering advice for citizens picking a Western moniker. Simon Usborne, who met a 'Porridge' and a 'Vampire' while in China, can see the problem
    Handy hacks that make life easier: New book reveals how to rid your inbox of spam, protect your passwords and amplify your iPhone

    Handy hacks that make life easier

    New book reveals how to rid your email inbox of spam, protect your passwords and amplify your iPhone with a loo-roll
    KidZania lets children try their hands at being a firefighter, doctor or factory worker for the day

    KidZania: It's a small world

    The new 'educational entertainment experience' in London's Shepherd's Bush will allow children to try out the jobs that are usually undertaken by adults, including firefighter, doctor or factory worker