Let’s sell financial protection, says travel industry boss
Financial protection should be sold to holidaymakers as an optional extra, a travel boss suggested this week at ABTA’s annual Travel Matters conference.
Richard Downs, founder and CEO of online retailer Richard Downs suggested Flight Plus should be ditched and instead it should be mandatory for travel companies and airlines to give customers the option to buy insurance to protect them against financial failure and to cover their repatriation costs in the event of a company failure.
However, no-one would be obliged to buy the cover, leaving it up to the consumer to decide whether they wanted to pay extra to protect their holidays, said Downs.
Such a move would mean shifting the cost of protecting holidays from the travel industry to the consumer, he said.
He suggested some travel companies could even turn the sale of financial protection into a money-spinner, adding a mark up on the sale of premiums. "If the premiums cost £5, the Michael O’Learys will charge £6," he said.
At the moment, the 40-year-old ATOL scheme is undergoing a review by the Government, while the European Commission is conducting a simultaneous review of the Package Travel Directive, introduced in 1997.
Kate Jennings, head of aviation policy implementation at the Department for Transport said the UK Government, which acts as a guarantor to the Air Travel Trust Fund used to refund and repatriate passengers following the failure of ATOL holders, was keen to reduce its financial exposure while still maintaining robust financial protection for the consumer.
She said it was looking to simplify what she described as a "complicated regime" and cut costs for the industry.
The Government has invited feedback from the travel industry by August 15 and Jennings said it "doesn’t have a view yet on what the future will look like".
However, Mike Bowers, TUI Travel general counsel UK & Ireland said: "We are disappointed the Government is minded to walk away from standing behind the (ATOL) scheme. We think the Government has an incredibly valuable role to play and there is no actual risk or cost to the taxpayer."
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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