More than 74,000 UK travellers had their holiday plans thrown into chaos this year after their travel companies went bust, figures show leading to a total bill of £26 million in compensation and repatriation costs.
Over the past 12 months, 24 holiday companies collapsed with the biggest casualties in the peak travel season in the summer when customer bookings and deposits are at their highest.
The situation was not as disastrous as in 2010 when 239 companies collapsed, affecting 189,000 passengers and resulting in £47m of claims being paid out.
But the average claim per passenger this year was £353 — a 40% rise on £250 last year — and £1,173 for long haul trips- 3% more than the £1,142 last year. The main factor behind the increase in the average claim is that more long-haul specialists have failed in the last 12 months.
The data is produced by the Centre for Economics and Business Research for the price comparison website Kelkoo, and is published as the travel industry embarks on the busiest holiday booking period of the year.
Despite the volume of successful claims, nearly one in ten travellers (8%) has missed out completely on compensation payments to which they are entitled. Over the past 12 months, the research showed, more than 6,000 customers have failed to submit legitimate claims for more than £2 million worth of refunds.
One of the largest collapses this year involved after the British tour operator Holidays 4 UK — which specialises in holidays to Turkey - and which also traded as Aegean Flights. Around 13,000 holidaymakers already in Turkey were sent home, while a further 50,000 people had their holidays cancelled. But many were small operations — including one of the most recent failures, The Little Black Book Limited, based in Bury St Edmunds.
When a holiday company fails, consumers who have booked package holidays are covered by ATOL (Air Travel Organisers' Licensing), as all providers selling these holidays must by law subscribe to this scheme. To pay for this protection, all ATOL holders add £2.50 to each customer booking, which is then paid to the Air Travel Trust (ATT)., operated by the Civil Aviation Authority (CAA). In the event of a travel company failing, the ATT fund is used to repatriate stranded holidaymakers and pay claims for losses incurred by customers. In the last three financial years, the ATT has received more than £103 million in ATOL protection contributions and spent approximately £93 million on 524,000 customers.
Chris Nixon, managing director of Kelkoo Travel, 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 fewer holidaymakers were affected by travel company collapses this year compared to 2010. On top of this, there has also been the backdrop of weak consumer spending and income growth that have dampened demand. All these factors have had a direct negative impact on travel companies."
