The Specialist Travel Association (Aito) is urging Government to change package travel regulations to help the survival of more than 120 small and medium sized businesses in its organisation.

The organisation issued the plea following a board meeting of its council on the impact of the coronavirus pandemic on its tour operator members.

Bharat Gadhoke, head of commercial, said the Package Travel Regulations were “no longer fit for purpose” in the current crisis.

He said: “The rules, designed to cover normal trading circumstances, cannot function in the current extreme situations in which we find ourselves. We have no option but to add our voice to that of others in the industry to demand government action to protect our long-established specialist businesses.”

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Under the PTRs, tour operators must refund consumer payments in full should the holiday company be unable to fufil a package.

Gadhoke said this put hundreds of company in the “simply untenable position of being a lender of last resort”.

It would be “extremely unlikely” that many would be be able to get monies back from airline and accommodation suppliers which would have been paid well in advance of the holiday, according to Aito.

Gadhoke added: “In this global crisis, it would be unreasonable to expect that they be required to abide by the requirements of the PTRs, which were not designed to cope with a disaster affecting every country and every destination worldwide. To do so would lead to innumerable company collapses and the loss of many thousands of jobs, which would cost the government dear for many decades to come.

“We urgently call on government, instead, to invest significantly in the long-term survival of SME tour operators and travel agents by altering the scope of the PTRs to enable agents and operators legally to defer planned holidays – or, at least, to refund only monies that suppliers have refunded to them, having first taken a reasonable margin to cover the initial work involved in organising the holiday.”

Aito said it understood an alternative solution to the refund requirements had already been suggested by the Italian government and was being considered by other EU members.

Gadhoke said: “We need urgent confirmation that our own government is involved in these discussions and that it recognises that speed is absolutely of the essence.”

In addition, Aito has urged the government to ensure that merchant acquirers, which facilitate the use of credit and debit cards, moderate their action to hold back sums of monies from some operators and agents to minimise their own exposure to risk.

“The extent of the merchant acquirers’ action on this front is already having a serious and deleterious impact on the cash flow of such tour operators and travel agents”, according to the Aito council, which also stressed that smaller players, not just travel giants such as British Airways and Tui, were in desperate need of help at this time.