Abta’s chairman said the association must “clarify” rules over when customers’ cash is collected and passed on to the supplier following the collapse of Thomas Cook.

Alistair Rowland said many travel businesses had got into the habit of living off customers’ cash having taken payments early.

Rowland and Abta chief executive Mark Tanzer spoke during a special session on Thomas Cook at the Travel Convention in Tokyo.

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Rowland told delegates there was “a problem generally” with over collection in the industry.

“Where we as Abta could help in some of the criticism of Cook is over early collection of cash,” he said. “It’s just not helpful. Many travel businesses historically in travel have lived from customers’ cash ahead of the payment schedule.

“We should make absolute clarity over when a collection takes place, when money is passed over, and in that time, what is protected in those funds either through the CAA or Abta.”

He added: “We can do a lot here to help ourselves in an area of the sector we have lived in for a long time.”

Rowland, who is also chief retail officer for specialist businesses at Midcounties Co-operative, said multiples were “chasing” former Thomas Cook shops and that there were at least three bids for most of the outlets.

“The trick will be getting those deals away quickly so we can trade again within four weeks”, he added.

MoreFull coverage from Abta’s Travel Convention in Tokyo