The surge in Atol bookings requires financial management

The record-breaking bookings of Atol-protected holidays this year, recently confirmed by the Civil Aviation Authority (CAA) highlight the strength of consumer appetite for travel. But they also raise real operational challenges for the small and medium-size (SME) companies tasked with delivering it.

 

The CAA reported that 10 million holidaymakers booked Atol-protected trips in the first quarter of 2025, with forward bookings for April-October at 12.8 million.

 

The surge is welcome news. However, it presents practical pressures for SME travel businesses. For many of these, balancing customer service with financial and regulatory responsibilities remains a challenge.

 

Atol matters for SMEs

 

Post-pandemic, travellers appear to be placing greater emphasis on value, reliability and the security of their travel plans, including clear routes to compensation if things go wrong.

 

This means the Atol badge remains a critical differentiator for many smaller businesses. It offers consumers assurance and protection and also levels the playing field with larger operators.

 

However, it places added emphasis on careful financial management. Trust accounts are a vital part of compliance for those which operate them, but the way they operate can sometimes slow down cash flow.

 

In general, you are permitted two working days to submit a payment request to your trustee. One simple habit can help – businesses should aim to submit payment requests by midday on the first day. Doing so often means the funds arrive sooner, giving you quicker access to cash when you need it most.

 

It also pays to think about how visible your trust arrangements are. Making it clear on your website that customer money is held in trust can go a long way to reassuring travellers. In a market where trust and security matter more than ever, a short, plain-spoken statement can give clients peace of mind that their money is protected.

 

In addition, with interest rates lowering at least somewhat, business owners should revisit how they manage cash balances. Where liquidity allows, using competitive instant-access accounts could help offset operational costs, especially in the quieter shoulder months.

 

As the sector continues to stabilise post-Covid, supplier negotiations also warrant attention – including your relationship with your merchant acquirer. Businesses with consistent payment records may find opportunities to revisit terms.

 

Beyond financial controls, SMEs are also having to adapt to a fast-moving market. Cruise remains buoyant, late bookings are rising, and destinations such as Albania and Montenegro are attracting more attention. Traveller preferences are moving towards experiences and value-focused trips, which will suit agile, customer-oriented firms.

 

However, the immediate priority for many businesses is to remain compliant. Accessing specialist knowledge, including about Atol rules and principal-agent distinctions, can provide helpful clarity when managing risk and maintaining compliance.

 

September marks the larger of the two Atol renewal windows, primarily for firms with financial years ending between December and April and covering about 60% of licence renewals. It is a critical point for SMEs to ensure their licence levels are aligned with current trading, and to assess their readiness for the next phase of business.

 

Companies with clear financial controls in place and benefiting from sector-specific guidance should prove more resilient as trading conditions evolve.

 

Zoe Powell is director of travel, hospitality and leisure at accountancy and advisory firm Xeinadin