2011 compensation claims hit £26m

2011 compensation claims hit £26m

A total of 74,000 holidaymakers reclaimed £26 million in compensation following the 24 travel company collapses this year, new research out today (December 26) shows.

The figure was an improvement on 2010 when 29 companies failed affecting 189,000 passengers and resulting in £47 million worth of claims being paid.

The average claim per passenger in 2011 totalled £353, rising to £1,173 for long-haul trips, compared to £250 and £1,142 in 2010, according to shopping comparison website Kelkoo Travel.

But not all holidaymakers submit claims and it is estimated that 6,000 consumers (8%) who have been affected by a travel company failure in 2011 are missing out on £2 million of refunds for which they are eligible.

Research by Kelkoo shows that more than seven in ten (71%) consumers would find it a financial strain to re-book their holiday while waiting for their compensation.

The Air Travel Trust has received more than £103 million in Atol protection contributions and spent approximately £93 million on 524,000 customers in the last three financial years.

The largest failures over the past twelve months have occurred in the peak season when customer bookings and deposits are at their highest.

The biggest collapse was Holidays4U in August, which led to 62,000 customers losing their holiday and making a claim and 12,000 travellers being repatriated.

While the impact of recent collapses have led to marginal increases in prices, the effect on holiday charges will be determined by the scale of future collapses in the industry, which could lead to rises in holiday prices, Kelkoo claims.

Managing director Chris Nixon said: “Economic conditions in the holiday market have been incredibly challenging in 2011 with travel companies having to contend with factors such as rising fuel costs and the impact of air passenger duty.

“But it is reassuring that significantly less holidaymakers were affected by travel company collapses this year compared to 2010.

“Since 2007, when Air Passenger Duty was introduced, package holiday prices have increased by 20%. On top of this, there has also been the backdrop of weak consumer spending and income growth that have dampened demand. All of these factors have had a direct negative impact on travel companies.

“Unfortunately, 2012 will see other holiday companies go to the wall, so travellers booking their summer holidays over the next few weeks should check that they book with an Atol-protected company, so they can be sure that if their travel company does collapse, then they will be compensated.”

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