The new £1 levy on ATOL-protected holiday sales will be a ‘dog’s dinner’ for many travel companies, according to sales and marketing director John Harding.

Speakers The Guild of Travel and Tourism Question Time at World Travel Market yesterday hit out at the new requirement. Although seen as a step forward, it still does not create a level playing field for operators because the Civil Aviation Authority will still require a bond from those who it deems financially less secure.

‘It will be of benefit for those able to show their balance sheets satisfactorily, but not so good for those whose financial advice isn’t good enough to avoid the ‘double-dipping’ of bond and £1 levy,’ said Harding. He warned some companies will try to avoid the levy.

Monarch Airlines managing director Tim Jeans added: ‘It is going to be desperately difficult for start-ups. Who is going to put up a bond for a new entrant, unless they have a massively strong balance sheet?’

However, Jeans said he was glad to see the back of the ‘money for old rope’ bond providers.

Travel Counsellors group chairman David Speakman warned the protection did not go far enough and all travel should be protected, including flight only, as the priority should be customer protection.

‘If an airline goes bust, people will say that all airlines should be covered,’ he said.

There was also concern about how travel companies present their figures, to avoid a bond. Sunvil Holidays managing director Noel Josephides said: ‘This is a very unstable industry.’