ABTA chairman John McEwan has warned agents to keep a close eye on their cash flow following the sudden failure of well-known Scottish agency Cambuslang Travel.
The company ceased trading on August 21 to the surprise of the Scottish trade. Owner John Wilson said the recession and decline in the family market were behind the closure.
“We had been going for 25 years, but the recession got us. We relied heavily on the family market, and families are either not going away, or are taking domestic breaks. Customers were afraid to commit themselves to a holiday because of uncertainty about their jobs,” he said.
Scottish Passenger Agents’ Association spokesman Sandy MacPherson said: “Everyone has been saddened by the news because Cambuslang Travel was a good, long-standing agency. It really came as a bolt out of the blue.”
McEwan warned the industry could see more failures as the peak season comes to an end. “If there are failures, they will be between October and January,” he said. “Everyone should be taking a good look at their business – you have got to be able to cover future costs.”
He said agents needed to manage their business more closely than ever. “When things are tight, you have to manage your finances even more tightly. Some travel agents are not so good at looking at their future financial position.”
The demise of Cambuslang Travel also raised fresh questions about financial protection. Customers who booked overseas dynamic packages with the agency may not be covered since the company did not hold its own ATOL.
There were 1,000 forward bookings, 300 of which were UK theatre-trip packages put together by the agency. Customers have received their theatre tickets, but will have to make a claim for their accommodation.
ABTA is processing all claims, and a spokeswoman said customers with existing bookings should contact the association or their credit card provider.
McEwan said agents should be prepared for more airline failures following the collapse this week of SkyEurope (see below). He said: “This is the first noteworthy airline failure this year. I would not be surprised if there are more.
“It is important for agents to be selling scheduled airline failure insurance.”