Is there any substance to claims Abta failed consumers over the collapse of Villa Parade? Juliet Dennis and Ian Taylor investigate
Whatever sent Abta member Villa Parade into liquidation on May 14 is now the subject of an investigation.
It’s also the subject of claims by rival villa-rental firm Rental Republic, which this week appeared in the national press.
Rental Republic, which trades as Travelopo, was also until recently an Abta member.
Let’s start with the facts. Liquidator Chris Brooksbank of insolvency firm O’Hara has confirmed Air Parade, Villa Parade’s parent company, failed with a debt provisionally put at £6.5 million, including £3 million owed to customers.
That does not make it the biggest failure since 2008, as the Sunday Telegraph claimed this week: the failures of Goldtrail Travel and Kiss Flights in 2010 were much bigger and there have been others involving more consumers. But villas rented through Villa Parade were expensive.
According to a letter addressed to Villa Parade owner Ian Sheekey last November, villa owners in Majorca believed the company owed them €2.5 million. This seems a sizeable debt for such a company. Abta was aware of problems at Villa Parade from early April when it initiated a code-of-conduct enquiry.
This was in progress when the company failed and theliquidator took over.
In the meantime, Travelopo emailed Villa Parade clients saying their bookings were no longer valid. Villa Parade obtained a court injunction ordering Travelopo desist, but it ceased trading on May 14 with 70 customers abroad and about 1,700 forward bookings – 1,300 accommodation-only and 400 Atol-protected packages.
Agreements terminated
Most other details are contested. Travelopo said it was approached by Business Resorts, an agency representing villa owners in Majorca, over Villa Parade’s alleged debts. Travelopo now has the contracts for Villa Parade’s properties.
It was Business Resorts that wrote to Sheekey, telling him the owners had agreed to terminate relations with Villa Parade and warning that subsequent bookings would not be honoured.
Abta insists it was not notified. A spokesman said: “We would have acted immediately if we had seen this letter. We definitely did not see it.”
A Travelopo spokesman said the company informed Abta by phone in March. He claimed Business Resorts also contacted the association and suggested Abta told Travelopo that “it had received calls from [Villa Parade] holidaymakers”.
Travelopo managing director Roger Fenton told the Telegraph: “Abta knew of this problem for at least eight weeks. We alerted Abta as soon as we realised the scale of the problem.”
Yet Abta insisted: “That is not true. It was April 9 [when Travelopo informed Abta]. It’s not true that Business Resorts contacted Abta … Abta had not received any complaints fromVilla Parade customers prior to Travelopo making contact with Villa Parade customers in May.”
Abta members or not?
To complicate matters, Rental Republic had its Abta membership terminated on April 11, two days after Abta said it first heard the allegations.
Travelopo said Abta raised the bond it required of the company and “Travelopo took the view it wasn’t worth it. Travelopo decided to let its membership lapse. It didn’t want to renew it”.
Abta begs to differ, stating: “Abta can categorically confirm that Travelopo did not write to resign its membership which, if it had not been terminated by Abta, would have run until June 30 this year. Membership was terminated because the financial requirements necessary for continued membership … were not complied with by April 11.”
Relations between Travelopo and Abta are the subject of legal correspondence and Travelopo has engaged a public relations firm specialising in legal cases.
Meanwhile, the company said it had helped rebook more than 1,000 Villa Parade customers: “We have agreed to honour the same villa for the same week at the same price for all affected holidaymakers.”
Brooksbank said it was too early to comment on whether Villa Parade owed villa owners. He said: “My job is to realise the assets of the company and investigate why it ended up where it did.” But he admitted the debts could be higher than £6.5 million.
Abta said it was “collaborating closely with the liquidator” and insisted all accommodation-only customers would get refunds.
An Abta spokeswoman said: “People are going to get their money back. That appears to be getting lost in this.”