The Civil Aviation Authority (CAA) has warned that 18 million consumers buying do-it-yourself holidays this summer risk losing out in the event of a travel company insolvency.

The warning followed a CAA survey of 5,000 visitors to travel shows in London, Birmingham, Manchester and Glasgow that found more than one-third (35%) believe a ‘DIY-holiday’, made up of a flight and room booked separately, will be protected if an airline, hotel or car hire company ceases trading.

The consumer protection group of the CAA, which oversees the Air Travel Organisers’ Licence (ATOL) system, pointed out that people will lose their money and could be stranded abroad if a company supplying any element of such a holiday collapses. It also suggested that the survey highlighted the benefits of booking all elements of a holiday with a single ATOL-protected travel company.

A CAA spokesman said: “Those building their own holidays using different suppliers should be aware they will not be protected against insolvency. We urge consumers booking DIY holidays to take their own financial protection measures such as buying with a credit card or taking out adequate insurance.”

However, credit card protection is limited and many standard travel policies do not cover a supplier’s insolvency. Moreover, card companies will only indemnify amounts above £100 per item.