Package holiday poised for comeback

Latest figures from the Civil Aviation Authority suggest the decline in availability of traditional package holidays has halted.

The CAA completed the September renewal of Air Travel Organisers’ Licences this week and reports the numbers are in line with a year ago for the first time in five years. The full figures will be released next week.

Tour operators offering package holidays are required to hold an ATOL and offer consumers comprehensive financial protection through the addition of a £1 ATOL-protection contribution to the price of a holiday.

But many travel companies, especially online, have increasingly offered flights and accommodation separately without consumer protection.

The collapse of XL Leisure Group last month highlighted the resulting confusion. Most of XL’s 85,000 holidaymakers abroad were able to complete their holidays and fly home without extra charge because they travelled on an ATOL-protected package. But those who had booked separately had to pay for flights and rooms.

Travel agents have subsequently reported customers asking whether holiday purchases are protected and the CAA believes some travel firms will increase their ATOL cover as a result. However, the authority says the latest renewal has come too early to show the full impact.

CAA head of ATOL licensing Andy Cohen said: “The decline in ATOL renewals appears to have stopped. But the timing of the September renewals gave little time for companies to react.”

He added: “The renewal was completed in exceptionally difficult circumstances for the industry and it is pleasing the result was comparable to previous renewals.”

About 60% of ATOLs come up for renewal in September and the remainder in March. Almost 1,300 firms applied to renew licences last month. The 132 holders that failed to renew, mostly small businesses, were similar in number to a year ago, while the 95 firms that failed to renew on time were close to half the number of last year.

The ATOL system offers protection to more than 26 million UK holidaymakers each year.

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