ABTA failure claims rose £8m in 2008

ABTA failure claims rose £8m in 2008

The number of ABTA members that failed last year fell from 32 to 30 but the amount paid out in claims rose by nearly £8 million.

The increase in claims in the year ending June 30, 2008, was mainly a result of the failure of Travelscope in December 2007. Claims totalled £10.6 million for the year compared to £2.6 million for 2006-2007, with most of the money paid out covered by failed members’ bonds, according to ABTA’s annual report.

Chief executive Mark Tanzer said in the report: “This was largely the result of one of the largest payouts in ABTA’s history. All of this sum was covered by the company’s bond and did not require any call on our captive insurance policy.”

Out of 30 company failures last year, 10 were members trading as principals, down on the 2006-2007 figure of 13. There were 20 travel agency failures in 2007-2008, one more than the previous year.

The number of consumer complaints also rose in the last financial year from 18,151 in 2006-2007 to 22,047 in 2007-2008. Of these, 777 went to arbitration.

At the same time the number of enquiries to the members’ information line also increased from 8,830 to 10,420 year on year. According to ABTA, this reflects a shift towards more emphasis on trade association activities, such as member services and lobbying.

Reflecting the consolidation of the industry, membership of ABTA also fell by 94 to 1,421 year on year despite the fact the organisation saw 55 new members join during the course of the year.

Three new members also joined the ABTA board last year: John De Vial, of Thomas Cook Stewart Baird of Virgin Holidays and Tim Williamson of TUI Travel.

Tanzer said ABTA’s priority for this year would be financial protection, favouring a system to protect all travel arrangements with a reform of the Package Travel Regulations.


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