07 October 2008

Consumer ââ¬Ëœconfusionââ¬â¢ over holiday protection

More than half of consumers have registered confusion over holiday financial protection.

Poll findings released at the ABTA Travel Convention show that 58% of people were not aware, did not know or could not remember if financial protection was included or not in the last holiday they booked.

However, 82% agreed that it was important that their travel arrangements are financially protected.

Only nine per cent of respondents were aware that financial protection was not included for the travel arrangements they bought and of those, a fifth [19%] then went onto complete the transaction anyway.

Meanwhile, more than three quarters of the 702 people polled by Ipsos MORI last month said that they arranged their own specialised travel insurance policies.

Additionally, 85% of holidaymakers who were aware of ABTA said that it was important that their travel company they booked with was an ABTA member.

ABTA chief executive Mark Tanzer said: ââ¬ÅâœItââ¬â¢s not surprising consumers are unclear about financial protection for holidays. The area is incredibly complicated. 

ââ¬ÅâœThe law governing the financial protection of holidays is now outdated, and the way we all buy holidays has changed massively over the past few years.

ââ¬ÅâœWe can see from this survey, that there is clearly a gap in peopleââ¬â¢s desire to be protected, and actually being protected. Either travellers assume cover is included or they donââ¬â¢t want to spend the time getting tangled up in that level of detail. 

ââ¬ÅâœWe have been lobbying government in the UK and in Europe to change legislation, but so far there has been no change, thatââ¬â¢s why in the meantime, travellers should book with ABTA members, who can provide them with financial protection and a high standard of service.ââ¬~

Meanwhile, ABTA has secured failure insurance for suppliers.

The supplier failure insurance is arranged through insurer International Passenger Protection.

It is designed to insure them against losses they incur when one of their suppliers fails.

ABTA principals are at risk when a supplier fails, as they are obliged to refund or rearrange customersââ¬â¢ holidays at their own expense.

The recent spate of airline failures have had a "significant impact" on ABTA package operators and under this new policy they could have been able to recoup their losses under the terms of the policy, according to the association.

ââ¬ÅâœThe cost of the cover will depend on a number of factors including the range and complexity of services offered, spread of turnover and other factors for listed suppliers. IPP will consider these factors and then present a premium tailored to represent business model of each principal,ââ¬~ ABTA said.

ABTA head of finance Mike Monk said: ââ¬ÅâœThis product will provide a welcome safety net for ABTA principals who have always in the past had to carry the burden for supplier failure without means of protection. This is even more relevant in the current uncertain world economic climateââ¬~

IPP director Paul McLean said: ââ¬ÅâœWe are very pleased to extend our long standing expertise to ABTA principals to bring peace of mind in these uncertain times and the unknown future to come.ââ¬~

by Phil Davies

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