Abta’s role in the collapse of Villa Parade – claimed to be the biggest failure in the travel industry since 2008 – fell under the consumer media spotlight yesterday.
The Telegraph reported that Abta was exposed to accusations it ignored warnings the company was in dire straits before it went under.
Villa Parade had continued taking holiday bookings in the weeks before it went into liquidation at the end of May.
But documents reported to have been seen by the newspaper show the owners of villas used by Villa Parade had been complaining they had still not been paid for the previous year’s bookings.
Villa Parade, through its trading company Air Parade Ltd, had run up total debts of more than £6.5 million – of which £3.3 million was owed to holidaymakers.
The company, which had been operating since 1999, had 1,000 villas on its books in Spain, Greece, Portugal and the US, and had boasted of being the third-largest villa rental company in the UK.
The newspaper quoted retired HMV boss Brian McLaughlin who said he was owed owed a £2,500 deposit on a villa in Majorca he had booked for three weeks in August for his family.
He said that he had contacted Abta in April after being warned Villa Parade was in financial difficulty.
“Abta told me that as far as they were concerned Villa Parade was financially sound and met their stringent conditions of membership,” said McLaughlin.
“But Villa Parade stopped answering the telephone and the final time I went on their website the message said they had gone into liquidation. So much for Abta and their assurances.”
Abta has now written to McLaughlin to tell him to reclaim his deposit from American Express, his credit card company.
Jon Williams, nutritionist to the Wales rugby team, was forced to pay twice for the same villa in Majorca – a sum of £2,500 to Villa Parade and a further £2,500 to another travel company which has taken over its bookings.
Having paid for the holiday home through Villa Parade, he then received an email from another company warning him that the money had not been passed on to the owner of the villa. If he wanted to stay in that villa, he had to pay a second time for his holiday in May.
Williams said: “We had been to the villa three times. It has an outdoor Jacuzzi which is great for our little girl.
“I didn’t want to risk going to Majorca and finding I was barred from the villa. Once I was out there, it was clear Villa Parade was no longer operating and its office had closed down.
“Abta was reluctant to get involved. They were absolutely useless. Abta is there to protect its members, not the public.”
Rival villa rental firm Travelopo approached Abta in April to warn the association that Villa Parade was allegedly not paying the private owners and owed them money.
A court injunction taken out by Villa Parade against Travelopo for emailing Villa Parade’s clients to say their bookings were no longer valid still stands, Travel Weekly reported on June 4.
In a letter sent to Villa Parade owner Ian Sheekey on November 18, 2013, the Telegraph reported that a company called Business Resorts, which represents villa owners in Majorca, said: “As you know you still owe Business Resorts and the owners over €2.5 million and we want full payment of all outstanding monies.”
Business Resorts then approached Travelopo to take on Villa Parade’s contracts, according to the newspaper.
Travelopo managing director Roger Fenton was quoted as saying: “Abta knew of the problem for at least eight weeks. The Spanish owners came to us in desperation because they hadn’t been paid for a year and were owed €2.5 million.
“Not only that, they had distressed holidaymakers turning up for accommodation they had booked through Villa Parade whose contract had been cancelled.
“We alerted Abta as soon as we realised the scale of the problem – which had clearly been brewing for well over a year. Abta should have acted faster.”
Travelopo claims to have evidence that some villas had been triple and quadruple booked by Villa Parade before it went bust.
Villa Parade has blamed Travelopo for the demise of its business after Travelopo emailed some of its customers to tell them that Villa Parade had not been paying villa owners.
Villa Parade has complained that negative postings on social media sites wrecked consumer confidence in the company and led to its rapid demise.
Abta defended its handling of Villa Parade’s collapse. A spokesman pointed out to the Telegraph that it had launched an investigation as soon as Travelopo raised concerns on April 9.
The spokesman added: “We will be working with the liquidator and other stakeholders to investigate the full circumstances of this failure, its causes and in relation to the recovery of all assets and losses.”
He insisted all customers will be reimbursed either through their credit card companies or through Abta. He said the process could take a few months but still leave holidaymakers time to book an alternative holiday.
The spokesman added: “The number of recent Abta company failures is at the lowest level in 20 years, but Villa Parade is one of the more significant in terms of forward booking.”